by Sutekh »
28 Mar 2024 11:24
Linden Jones' Tash Stranded WestYorksRoyal The main question to ask is what happens if it doesn't work. The buy low, develop players, use the academy, sell high strategy sounds great. But football is competitive and these strategies are not simple to execute.
If we're still in L1 in 5 years and the investors are disappointed, what's their plan? Commit, look at what's going wrong and try to improve? Or cut losses and move out? And if it's the latter, will they continue to fund the club while they find a buyer?
Most professional investors know that they will lose on some investments - football is a very risky investment but with the potential for almost unlimited returns if you can get into and stay in the PL. The prospective new owners are taking that bet that with the PL standard infrastruture we have that with sensible investment in the playing staff, both first team and academy, there is a strong chance that they can get the club there - at which point they can see some or part of the club.
Look at the sale of 40% of Ipswich this last week or so - that will be a model for them, get the club to a spot where other investors are willing to buy in to help the club grow. If we stagnate, then like a lot of investors they will look to divest to recoup whatever they can and move on - the key info will be how the assets of the club are set up post buy out - will they return to The Reading Football Club Limited or will they reside with an external 3rd party company - the latter would naturally be concerning.
Ultimately, though, it is still about relying on "more money" being pumped than the level of revenue generated from fans and/or traditional sponsorship - and then hoping that the "sensible investment in playing staff' is better than others so that our club climbs the leagues.
I'm struggling how this squares with the protest at the 'football has an ownership problem' - we are still relying in the benevolence of others - whether so called Chinese or Russian Billionaires, Thai investors, Sovereign Investment funds or Private Equity - i.e. we still just want a sugar daddy who makes the right calls.... right?
Yes, that's how football works in most of the top leagues and will continue as such until the likes of FIFA start demanding clubs are run to a more equitable model. If all clubs were forced tomorrow to work with only the money they could each generate through sponsorship, ticket sales, merchandising, player investment, tv rights etc. things would get very interesting for those that could survive at all (but at least player salaries would crash through the floor).
You just have to hope your club is good at it. SJM's ethic was pretty flawless in the scheme of things, but still couldn't make a profit but that's probably the model you have to hope the club can now go on to emulate in some way or other. Just hope whoever comes in understands the important community relationships that all clubs hold and gets to enjoy the experience of what RS can serve up on the pitch each week.