I think I read it wrongly yesterday.
My interpretation is that the point of the whole piece was that the stadia were built with public/lottery money, and that Gold et al were benefiting from a crap contract with a 10 year clause - sell before then, and there was a 20% payment due back to taxpayer. Wait until 2023, and it's none. It was a very long way round to get to that rather odd point that Gold got a good deal.
He didn't say much about City, and seemed rather more tenuously connected, but the stand-alone sentence in the middle seems to be his bugbear. I don't think it's a slight at City though, it's about stadium re-use.
We have been here before. When Thaksin Shinawatra was evading the Thai authorities in 2008, the country’s former prime minister sold Manchester City to Sheikh Mansour bin Zayed Al Nahyan for £150 million having spent an estimated £60 million in acquiring and investment in the single year he was in control. The club’s stadium, built with lottery funding for the 2002 Commonwealth Games, and converted to football with £49 million of public money, played a major role in the deal. There was no agreement by which any of the profit made by Shinawatra could be recovered for the taxpayer.
Once again, the cost of staging major events such as the Olympics falls on the taxpayer while the long-term profits are privatised.
There is another side to the argument, of course, that says infrastructure investment attracts its own rewards. Perhaps Sheikh Mansour would have been less inclined to buy City and invest what he has since without a modern stadium in place. City have since extended the capacity although they do not own the Etihad, for which they pay an annual tenancy to the city council, now around £5 million.
Thanks to those who left kind words about my contribution to this thread above. I was meaning to come back later and address the above quotation from Sam Wallace's article, in particular the part I've bolded and underlined. It's simply financially illiterate.
When Thaksin sold City to ADUG, the club, based on its enterprise value (essentially, its debts added to the value of the issued shares in the club), was valued at GBP 210 million. That comprised GBP 170 of debt and GBP 40 million for the shares in the club. This meant that he'd made a profit on the shares of around GBP 20 million, haing paid GBP 21.6 million for them a year before.
He also made a profit of GBP 5.5 million on loans previously made to the club by John Wardle and David Makin. Those loans, including accumulated interest, were worth GBP 23 million, which Thaksin received in full from ADUG along with GBP 22 million he'd loaned to the club himself in his period of ownership. He acquired the Wardle/Makin loans for GBP 17.5 million the previous year.
In addition to monies owing direct to Thaksin, the other debt in the GBP 170 million figure included GBP 42 million relating to future stadium rent (this isn't conventional debt as such, but City's accounts treat the stadium lease as a notional finance lease to reflect future liabilities under the arrangement). Then there was GBP 41 million still owed under two securitized loans taken out in 2003, GBP 25 million borrowed from Standard Bank under Thaksin, and GBP 16 million of unspecified other borrowings incurred during Thaksin's time.
So when Wallace says that Thaksin sold City for GBP 150 million, I have no idea where this figure comes from. It just seems an absolute falsehood. Thaksin received payments totalling GBP 85 million in the ADUG takeover, but GBP 45 million of that represented monies borrowed by the club and owing to him. His profit on the deal was in the region of GBP 25 million, not GBP 90 million as Wallace implies, referring to GBP 60 million he supposedly spent on shares and invested.
The assumption that any profit Thaksin made must be due to the stadium is also flawed. He bought the club a year previously and the situation with the stadium was exactly the same then. As I wrote previously, City's international profile was much greater after a year under Thaksin and Sven, which meant that ADUG were willing to pay more than Thaksin was a year before.
Finally, Wallace gives no consideration whatsoever to the benefit derived by the public from the deal as it was actually done. If City hadn't moved to the stadium, the alternative was to have a marginally bigger version of the Regional Athletics Arena as the only stadium on the site. What a miserable Commonwealth Games legacy that would have been! As it is, City have contributed plenty financially and continue to do so.
So the comments on City in this article represent a really shoddy piece of journalism. The false figures and fallacious arguments add up to a truly dreadful piece.
