Out of the Icelandic frying pan

We may soon be out of the Icelandic frying pan, but until we have a clue about the details of the takeover we cannot know where we have landed.

How long will it take for us to learn the level of debt the takeover resulted in? My bet is that there will be an avalanche of rumours on that topic when the takeover is done as all the losing parts will try to brand the winner a potential catastrophe. But the truth will probably not be public until the financial report on this period is published – if even then.

It's far from certain that the debt we are so concerned about will go away with new owners. This bidding war has certainly done nothing to help. One thing that has been clear through all this is that the bidders have had a hard time convincing Rothshilds (Straumur/CB holdings) that they have enough dosh. As the banks have been heavily involved in the discussions one can also conclude that the new owners are taking over these loans in one way or the other, rather than just paying them off. This means that the banks wants to make sure that the new lot are financially solid enough to service the loans. Based on what the banks think about the new owners they may also want to renegotiate the terms.

Martin Samuels wrote in an interesting piece the other day that "...right now we are mistaking the failures of individual clubs for a malaise in English football as a whole" and I agree that there have been several big mistakes, but I like the "financial doping" metaphor used by the All Party Parliamentary Football Group to describe some of the big clubs way of running their clubs. It gives these clubs advantages in the short run albeit by risking their long term health.

I will be a bit more worried if Tony Fernandes, Intermarket or Cellino makes the deal (for this kind of problems that is,, I agree there are other concerns with the others). We know they don't have the cash to just buy the Club and pay off the loans and so how would they finance it? Loans? Investors? Probably loans secured by so called investors. This is when you build insecurity into the club (lex Glazer). On the upside the timing is probably to any new owners advantage. Even though I think that as an investment a football club will always be risky and, in an ordinary - non football inclined - investors view, suboptimal. But the risk of the finances of the world bringing the new owners down á la BG doesn't seem that big (famous last words?).
But then there is always going to be businessmen in trouble. Especially those heavily in to risk ventures, airlines for instance.
I’m not quite sure if this applies to Cellino as he seems to have come in late and with a bid that appears to have been accepted more or less right away, but my guess is that it does. He is not wealthy in the Sheikh Mansour sense of the word.

But please don't brand me anti Fernandes because I am a bit worried about where he will take us. My concern is about every future owner, even though G&S knows about the reality of owning a club and may be less prone to "do an Eggy".
Having owners that are genuine supporters are obviously also a good thing, whether they need to fly to the home games or not, but if they need to stretch their funds too far to get possession I rather they didn't.

As a burnt child I’d really want to stay clear of the fire, or at least know if I'm in it as quick as possible.