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This is the kind of news I like to read

Discussion in 'Rugby League Forum' started by WAMF, Jul 23, 2010.

  1. WAMF

    WAMF Well-Known Member

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    From the smelegraph.

    AFTER becoming the first NRL club to embrace privatisation, Manly are slowly becoming a community asset once more.

    In the past year the football/leagues club consortium has reclaimed 15 per cent of shares from majority owners Max Delmege and Scott Penn.

    And this week's most recent purchase nudged the members' ownership beyond the 25 per cent mark.

    "The aim is for all three to be 33 per cent equal partners and that will probably happen over the next 12 months," a Northern Beaches source told us.
    ----------------------------------------------------------------------------

    Well done to all concerned at the FC.
    Please, if you are not yet a member of the FC, this is why you need to be.
     
  2. Cameron

    Cameron Cambo Premium Member

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    hey wamf you do realise its the leagues club that is buying the shares the fc doesent have that sort of cash
     
  3. Dan

    Dan Administrator Staff Member Administrator 2016 Tipping Competitor

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    Cambo it is still great news!
     
  4. ManlyBacker

    ManlyBacker Winging it Staff Member

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    There has been a change in the way that the Leagues Club grant is done. It is now considered an equity injection into MWSE Ltd and they are issued with new shares. It was agreed to by the MWSE Board and it is a fair result for the money put in.

    If the private company ever releases the figures we might know the costs associated with running the business. It would also seem fair to me that any extra funds put into the company to cover shortfalls in costs are also treated as new capital, or that all equity partners are required to cover shortfalls based on their percentage holdings.
     
  5. Guest

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    yeah good news  WAM  , im a FC  member,
     
  6. vidmar

    vidmar Well-Known Member

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    Hi MB, All funds that are put in to the company by any of the 4 owners whether to cover shortfalls or as new capital are rewarded with equity.
    Vid
     
  7. SeaEagleRock8

    SeaEagleRock8 Sea Eagle Lach Staff Member Premium Member 2016 Tipping Competitor

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    This possibility of equity in return for leagues club funding was mooted some time ago, but there was no action announced  . . . or none that I ever noticed.
    And since when was the aim of 'all 3' to have 33% each?
    And since when is the third owner 'a football/leagues club consortium' ?
    This news must have slipped from my memory I guess.
     
  8. Guest

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    hey wamf you do realise its the leagues club that is buying the shares the fc doesent have that sort of cash
    [/quote]

    Are those funds on top of the leagues club grant?
     
  9. vidmar

    vidmar Well-Known Member

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    G'day Ser8..in answer to your question (and yes I know there is a bit to read but it covers the points that will answer his (and Tookeys) question and will (I would hope) be of interest to other fans than are wondering what is going on behind the scenes with ownership of the club)

    From an email sent by Bob Reilly (Leagues Club and Football Club Chairman) to all Leagues Club members 19th October 2009:-

    "The Board therefore decided on 3 key principles for the future:

    1. A base grant of no less than $200,000 should be confirmed for every year
    2. Should profitability allow it, the League Club will provide more to the Sea Eagles – up to 50% of total League Club profit (as opposed to over 100% over the last 16 years!)
    3. Any funds over and above the base grant of $200,000 per year should be in exchange for shares in the Sea Eagles"

    From an open Football Club letter (copy on this forum in September 2009) :-

    "Our #1 priority over the next 5 years is to fund the purchase of new shares in the NRL franchise. This is not about “buying back” existing shares from the Penn & Delmege families. It’s actually about new capital that will help secure the financial future of the team. At the same time, the Football Club will work to preserve the things that we all care so passionately about: Brookvale Oval, our colours, our emblem and our name.
    We’re not just about defending the great history & traditions of this Club. We want members to play a central role in the future of the Sea Eagles.

    We are in the process of purchasing 100,000 new shares in the Sea Eagles with our existing funds; our goal is to purchase even more over the next few years."

    There are of course close links between the Football Club and the Leagues Club including the fact that several people are directors on both boards.

    As both clubs are member "owned" and want to see the long term future of the club it makes sense that they work closely to assist the private owners achieve this.

    Understandably as the Leagues club is able to generate considerably more funds annually than the Football Club and with over 20,000 members it is obvious that they will be able to contribute more financially each year (as they typically have over the years) and the Football Club holds the important preference vote regarding key aspects as to where we play, what we are called and the colours we play in (ie no more Northern Eagles playing a season away from Brookie)

    Both entities have an important role in ensuring that the average supporter continues to have some ownership and a say in the Sea Eagles

    Nice to know that the proceeds from a couple of beers pre-game and chips and gravy for the kids on game day is all going to a good cause
     
  10. The Wheel

    The Wheel Well-Known Member

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    Vid - Only a couple of beers?
     
  11. Guest

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  12. vidmar

    vidmar Well-Known Member

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    LOL - yes, other people buy me the others...
     
  13. ManlyBacker

    ManlyBacker Winging it Staff Member

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    LOL - yes, other people buy me the others...
    [/quote]

    Probably the same way others buy the sandwiches ;)
     
  14. SeaEagleRock8

    SeaEagleRock8 Sea Eagle Lach Staff Member Premium Member 2016 Tipping Competitor

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    Vid I may even buy you one on Sunday myself.

    But meanwhile, as someone who isn’t a Leagues Club member, the last I heard of all this was last year, as you quoted above. For some reason I had the impression at that time that the Leagues Club email was more like a negotiating position, rather than something that had been agreed between all parties.

    So does this mean that the Leagues Club now owns shares in its own right?
    If so how does this affect FC members? Or affect the usual arguments advanced as to why we should become FC members?
    Re ‘33%’ – is that in fact the current position of the private owners as well?
    And does that mean the FC has abandoned its goal of acquiring shares? (and/or is happy for the LC to purchase shares instead?)
    A number of questions come to mind…

    There are certainly reasons why a larger ‘community stake’ in Sea Eagles ownership  could be a very positive development. But if the community stake is growing and is linked to funding, does that mean the private owners are no longer putting in?

    All quite mysterious…
     
  15. vidmar

    vidmar Well-Known Member

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    SER8 - Will look forward to that beer but if you get me a sandwich please get them to put it in a brown paper bag?  ;)

    In response to you post above...

    Cash from Leagues Club (over the $200k grant) gives them equity (shares) in the Sea Eagles Limited - This was agreed at MWSE board level

    So Leagues Club increase their percentage ownership each time they front up more cash.

    The “pie” is made bigger by more shares being issued so the private ownership don’t sell shares to the Leagues or FC but as the pie is bigger the private owner percentage is smaller?

    Sea Eagles membership contributes funds to the running of the team – FC membership contributes funds (via capital investment) but also increases the equity that fans have in the company and as such increased ownership – the FC has 2 seats on the Sea Eagles board which allows voting members a say at Sea Eagles board level via the FC board members who represent us – Sea Eagles members don’t have such a representation. (The Leagues club currently has one seat on the Sea Eagles board)

    As such FC membership protects that representation, increases the ownership by supporters and a strong FC membership ensures that the preference vote is protected.

    My understanding is that the private owners are happy with the level of financial investment that is being made by the Leagues Club and Football Club

    The FC and the Leagues Club providing capital and buying shares reduces/negates the reliance on funds from the private owners and contributes much needed money to help run the team.

    The Football club has purchased 100,000 shares so far this year and will purchase further shares at the end of the year (remember the vast majority of revenue for the Football Club comes from memberships and renewals fees which are due at the end of the calendar year)

    I don’t know how much the private owners put in and to be honest would see it as rude to ask them. What is evident is that both of the private owners saved our club and without them we who knows what would have happened.

    The more financial support that comes from the supporter community and the greater equity that the Leagues Club and Football Club has the less reliance we have on private owners having to assist with funding which of course is a positive.

    See you Sunday
     
  16. Jerry1

    Jerry1 Well-Known Member

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    Issuing new shares every time there is a cash injection will only devalue & dilute the share price. If the funds are given to cover shortfall there could be  perceived  no equity gain.

    What I have seen done in similar circumstances are directors / shareholders loans that are secured against assets but I supposes the aim of the leagues club is not necessarily to look for a return on it's investment.

    Still seems a strange way of doing things.
     
  17. byso

    byso Well-Known Member

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    Vidmar

    Because Penn owns the Leagues club does this therefore mean Penn's share increases?
     
  18. SeaEagleRock8

    SeaEagleRock8 Sea Eagle Lach Staff Member Premium Member 2016 Tipping Competitor

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    Pretty sure he only owns the building, the leagues club itself is not connected with Penn.  However it does raise the prospect of the leagues club wanting more say on the board as their ownership increases? (Maybe we should join the leagues club instead of the FC ?!)
     
  19. vidmar

    vidmar Well-Known Member

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    The landlord of my office accomodation has no ownership/equity in my business and has no say in the running of it hence the Penn family has no say in the running of the Leagues Club or entitlements to any of the equity or assets it may own (The leagues club entity is owned by the 20,000 plus members)

    Don't get confused by the fact that one of the private owners of the Sea Eagles owns the building that the Leagues Club is based in?

    One would think that the Leagues Club at some stage would be pushing for another seat at the board table but I guess that is for them and the MWSE board to work out.

    Joining the Leagues club will assist in them commiting funds (but remember they make most of their revenue from food, beverage and pokies) however the Leagues Club commit to a maximum of 50% of its profit as above (which is still a good chunk of cash hopefully!)

    The key asset the Football Club has is the preference vote (important for those that are opposed to games away from Brookie!)

    Additionally its members generally take a greater interest in the running of the Sea Eagles (Many Leagues Club members will be "social members" as they are locals joining to get the benefits associated with belonging to a licensed club) so FC membership is more appropriate for supporters of the Sea Eagles.
     

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