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Dell v Mel


kevinhectoring
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Here's a piece in the Financial Times from February about MSD Partners getting into football and loaning money to Derby. It says in the article they have zero interest in owning the club.

The FT sometimes has a paywall, but to read this I only had to answer one marketing question and it opened up:

https://www.ft.com/content/243f4030-aa2f-43c4-be32-723ba868d27a

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16 minutes ago, Carl Sagan said:

Here's a piece in the Financial Times from February about MSD Partners getting into football and loaning money to Derby. It says in the article they have zero interest in owning the club.

The FT sometimes has a paywall, but to read this I only had to answer one marketing question and it opened up:

https://www.ft.com/content/243f4030-aa2f-43c4-be32-723ba868d27a

But it is in there interest to at least help facilitate a new owner. As others have said, the charges on the stadium and training ground are basically worthless without a football team to play in them.

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54 minutes ago, therealhantsram said:

But it is in there interest to at least help facilitate a new owner. As others have said, the charges on the stadium and training ground are basically worthless without a football team to play in them.

The piece says that traditional lenders won't touch football clubs because they don't want the situation of defaults and inheriting football stadia etc. Presumably MSD entered the market knowing the risk but accepting it because of the incredibly high rewards. But they must have a plan in place for when it happens. Perhaps they will take the club out of administration without the debts, and then sell it on to a third party, having made it more attractive. And then offer that new owner a high-interest loan facility when required.

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11 hours ago, Coconut's Beard said:

What about the loans MSD have with other clubs? Have I missed the post where someone explains how we'd get around them not being allowed to own a club when they've got money sitting around helping to fund others, or are people just wilfully ignoring reality to come up with a fantasy scenario where we don't end up in administration?

Clubs will have all kinds of loans from the same bank, investor etc. Only an ownership interest would result in a conflict I'd have thought. I'm not aware MSD own any interest in other clubs. 

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2 hours ago, Carl Sagan said:

Here's a piece in the Financial Times from February about MSD Partners getting into football and loaning money to Derby. It says in the article they have zero interest in owning the club.

The FT sometimes has a paywall, but to read this I only had to answer one marketing question and it opened up:

https://www.ft.com/content/243f4030-aa2f-43c4-be32-723ba868d27a

They are interested in any investment that makes them money I reckon 

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1 hour ago, San Fran Van Rams said:

Clubs will have all kinds of loans from the same bank, investor etc. Only an ownership interest would result in a conflict I'd have thought. I'm not aware MSD own any interest in other clubs. 

In the scenario some posters ran with MSD would become owners of Derby.

Do you think the owner of one club can simply lend money to another - not in a business transaction connected to a player sale but as a direct contribution to their running costs - without there being a conflict of interest? That's what people were suggesting!

I'd be flabbergasted if that was the case. 

Edited by Coconut's Beard
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4 hours ago, Coconut's Beard said:

In the scenario some posters ran with MSD would become owners of Derby.

Do you think the owner of one club can simply lend money to another - not in a business transaction connected to a player sale but as a direct contribution to their running costs - without there being a conflict of interest? That's what people were suggesting!

I'd be flabbergasted if that was the case. 

I see what you mean but I'm not sure what rule or law there is against that unless it's a specific EFL one. Intercompany loans are common.

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Will msd takeover Derby, they didn't take over Southampton or Sunderland.

I think the Sunderland situation has similar hallmark to Derby, msd were set to takeover Sunderland, formed a holding company to takeover Sunderland but that's not what happened.

It just became about the loan.

Mel went on record saying that after he put the club into administration, around 15 interested parties came forward of which 3 are strong contenders for a takeover.

I think I'm right in saying that in the first instance the fans are legally given the first opportunity to takeover the club. That's obviously highly unlikely to happen.

Any interested party wanting to take over the club has to show that they have enough credit to be able to take over the club, so probably at least 30 million.

In my opinion 30 million isn't a figure that someone would pay for Derby, your basically just buying the brand as the stadium and training ground don't belong to Derby.

The academy and junior players are the only real assets. Yet if you sell any of these, what is the club left with.

To rebuild the team costs a lot of money, plus the transfer embargo would have to be removed or what's the point.

Mel reportedly said something about the amount required.

I dont think Mel would have mentioned  interested parties if it was a simple matter of MSD taking over the club.

In my opinion a good comparitor for Derbys current situation would be Stoke city when the coates family took over.

 

 

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8 hours ago, Coconut's Beard said:

In the scenario some posters ran with MSD would become owners of Derby.

Do you think the owner of one club can simply lend money to another - not in a business transaction connected to a player sale but as a direct contribution to their running costs - without there being a conflict of interest? That's what people were suggesting!

I'd be flabbergasted if that was the case. 

Don’t think MSD could own us and have loans to other clubs. But if they were clear their best option was to buy us, they could work around that I would think (say by shunting loans around ). 
 

We can’t possibly know what the likely outcomes are without much more Information. What we really need is for MSD to conclude their return is significantly improved if administration is avoided. Then they will work much harder to avoid it. 
 

if they reckon they get paid out in full even if we go into admin, there’s no avoiding admin I’d say  And they are not fools so it’s unlikely they are looking at a write off, but who knows 

 

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17 minutes ago, kevinhectoring said:

Don’t think MSD could own us and have loans to other clubs. But if they were clear their best option was to buy us, they could work around that I would think (say by shunting loans around ).

We can’t possibly know what the likely outcomes are without much more Information. What we really need is for MSD to conclude their return is significantly improved if administration is avoided. Then they will work much harder to avoid it.

if they reckon they get paid out in full even if we go into admin, there’s no avoiding admin I’d say  And they are not fools so it’s unlikely they are looking at a write off, but who knows 

 

I'm not sure how they'd shunt loans around without other clubs needing and agreeing and being able to pay back the money? Surely they couldn't just effectively let the other clubs off, or force one club to pay up in order to take control of another? The financial knock-on effects of that would seriously put in doubt the spirit and legitimacy of the competition, would they not?

 

The part of the EFL rules covering joint interests is at https://www.efl.com/-more/governance/efl-rules--regulations/sections-10--11---association-and-dual-interests-and-additional-provisions/ - section 105.
 

Quote

105.1  Except with the prior written consent of the Board a person, or any associate of that person, who is interested in a Club cannot at the same time be interested in any other football club.

105.2  A person shall be deemed to be interested in a football club if he, whether directly or indirectly:

105.2.5  has lent to, gifted money to, or purchased future receivables from or guaranteed the debts or obligations of that football club (or any other arrangement of substantially similar effect) otherwise than in the ordinary course of banking

I suppose it would then hinge on the bits in bold, the first of which is explained with

Quote

110.1 In considering whether or not to give its consent to any matter referred to in Regulations 104, 105 or 106 the Board shall have regard to the need to promote and safeguard the interests and public profile of Association Football, its Players, spectators and others concerned with the game, and shall have regard also to the objects of The League as set out in its Memorandum of Association.

...but what constitutes "the ordinary course of banking" is up for dispute - other clubs tried to get our MSD loan cancelled on the premise that it wasn't, but nothing came of that challenge.

Edited by Coconut's Beard
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20 minutes ago, Coconut's Beard said:

I'm not sure how they'd shunt loans around without other clubs needing and agreeing and being able to pay back the money? Surely they couldn't just effectively let the other clubs off, or force one club to pay up in order to take control of another? The financial knock-on effects of that would seriously put in doubt the spirit and legitimacy of the competition, would they not?

 

The part of the EFL rules covering joint interests is at https://www.efl.com/-more/governance/efl-rules--regulations/sections-10--11---association-and-dual-interests-and-additional-provisions/ - section 105.
 

I suppose it would then hinge on the bits in bold, the first of which is explained with

...but what constitutes "the ordinary course of banking" is up for dispute - other clubs tried to get our MSD loan cancelled on the premise that it wasn't, but nothing came of that challenge.

By shunting loans around I mean transferring the benefit to someone else. So ceasing to be the lender by selling the loan. Dell doubtless has a web of trusts and partially owned companies and if he really needed to he could work out how to sidestep the rules without being too wide. Look I don’t think ownership by Dell is a likely option but we’ve no reason to rule it out yet 

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18 minutes ago, kevinhectoring said:

By shunting loans around I mean transferring the benefit to someone else. So ceasing to be the lender by selling the loan. Dell doubtless has a web of trusts and partially owned companies and if he really needed to he could work out how to sidestep the rules without being too wide. Look I don’t think ownership by Dell is a likely option but we’ve no reason to rule it out yet 

Ah, OK. Got ya. Cheers.

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7 hours ago, jimtastic56 said:

If the rumours are true, Mel got MSD to give him a £30 mill loan against Moor Farm . Which is basically football pitches on farmland . Worth about £5k an acre. MSD could take a big hit.

Have you ever been to Moor Farm? State of the art facilities there, albeit on rented land. It would make a brilliant spa, or sports injuries facility or corporate venue for team building. A huge gym, indoor pitches, dining facilities, hydro pools, offices, classrooms, changing rooms. And goodness knows how many pitches, some all weather. Maybe we should rent it out? 

I think its big drawbacks are no facility for overnight stays and a council reluctant to give planning permission for any further developments. 

Edited by angieram
A stray y
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2 hours ago, angieram said:

Have you ever been to Moor Farm? State of the art facilities there, albeit on rented land. It would make a brilliant spa, or sports injuries facility or corporate venue for team building. A huge gym, indoor pitches, dining facilities, hydro pools, offices, classrooms, changing rooms. And goodness knows how many pitches, some all weather. Maybe we should rent it out? 

I think its big drawbacks are no facility for overnight stays and a council reluctant to give planning permission for any further developments. 

MSD charge is against the lease only on Moor farm

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