City Football Group | Secure $650m loan facility for infrastructure projects (p 54)

[KS55]

So many people simply don’t understand what money laundering actually is.

It drives me mental.

Take a deep breath and ignore them.

 

[Marvin]

Even if Silver Lake's intention is to recoup their investments in dividends, then the amount of profit we would be making would be beyond belief . A 10% share of dividends to recoup $1/2 billion would mean profits from the CFG (City are the only profitable part ATM) would have to be in the $00's millions every year.
So if a cash return was the reason - and that seems generally what people consider to be the worst possibility - then it's still great news for us. If we were to make that kind of profit then we'd have to be one hell of a football team and East Manchester become a money making Mecca.
And even if the most disastrous events should come about I will be forever grateful to Monsour bin Zayed Al Nahyan for giving us better football than I could have ever dreamed of. Thank you Sheikh Monsour.

City do not pay dividends - at the moment.

 

[KS55]

City do not pay dividends - at the moment.

Surely it's about capital appreciation by getting in on the ground floor of a potential explosion, i.e. football and associated activities in India, China, Pacific rim etc.

 

[waspish]

So many people simply don’t understand what money laundering actually is.

It drives me mental.

Breaking bad sports washing ;)

 

[Marvin]

The combined enterprise value of the 32 most prominent European football clubs increased nine % in 2018, and has grown 35% over the past three years. This growth rate contrasts with the fortunes of European stocks in the same period, the Europe 50 Index value fell 13% in 2018
Given the current levels of growth in the sports market, an investment in a football club is a smart portfolio choice, and the holy grail for the PE investors is CFG.

If a sector has outperformed historically, it does not mean it will continue to do so.

 

[Rolee]

So many people simply don’t understand what money laundering actually is.

It drives me mental.

It's washing that dirty oil off the money, isn't it?

 

[Keith Moon]

If a sector has outperformed historically, it does not mean it will continue to do so.

Thats true, but with CFG today you get eight markets under one umbrella, and we will probably soon add clubs in Brazil, Mexico and the MENA region.

 

[Cobwebcat]

For those wondering about loss making in the non MCFC City Group....don't there is a bigger plan afoot.

You've got to think much longer term.....

"He added: 'The sharing of knowledge across all organisations was amazing. I couldn't do that with any other teams. It was having that access to different philosophies and coaching ideas that made Red Bull so different to work for.

'I could go to Salzburg whenever I wanted without anyone questioning it. That is quite unique. What Jesse Marsch has done, in coaching three teams, is unprecedented. Manchester City are the only ones that come close and they are a way behind."

Catching up now though aren't we? Clever people see things we can't.

https://www.dailymail.co.uk/sport/f...olution-energy-drink-empire-shaking-game.html

 

[Marvin]

Surely it's about capital appreciation by getting in on the ground floor of a potential explosion, i.e. football and associated activities in India, China, Pacific rim etc.

It's encouraging that an independent company has made a commercial, and therefore rational decision to put their resources into City. I would not invest directly in a sports team, it's difficult enough as it is without factoring in extra variables associated with sporting success. They probably take the long term view and believe that sporting success follows good management but I think luck comes into it as well, and footballing insight of one or two individuals, and as we see from Man Utd, investment managers like Woodward are in no position to make footballing judgments.

 

[SilverFox2]

Re Oak view / stadium ...They could definitely help but then could so many other companies and they could do this regardless of an equity stake.

RE ownership / dividends Very true. Indeed as long as the Sheik contains 51% or a controlling stake (if shareholdings are very diluted among many owners you can control a company with an even smaller share) then they can do as they please. However, they will probably have given assurances regarding future business plans and how those investors will be ultimately rewarded. This could even take the form of allowing them to increase their equity stake in the future subject to certain criteria being met. Indeed, equity firms often take small stakes to start with until they understand the business then take a controlling stake or full ownership of the business. I am not saying this will happen, but it does open up that possibility and it is something we haven't had to think about before

You could regard all of this as almost inevitable because you could argue that at the end of the day our owners would have to free up some of the capital they have put into the business and it would be too good to be true for it to continue as it was. However, that doesn't make it good news and I personally would prefer a partner that wasn't primarily a Finance house and was able to offer an alliance which was obviously much more strategic in terms of their core / underlying business. A good example of that would be the Chinese deal that was done or a deal with a pure media giant. But I guess it depends what was on the table at the time ...

I note CFG is the Holding Company for its members, so does any dilution of shareholding affect the need to protect HC status?