So… the long-awaited news on the next phase of the Mark Attanasio investment has finally landed.
The Pink Un lads, Connor and Paddy, have done a superb job in spelling out the latest and what it all means, so I’ll not attempt a blow-by-blow analysis of the mechanics of this morning’s news but instead try and offer a layman’s overview and some thoughts on what has been announced.
For those who have an eye for detail, I’d thoroughly recommend Paddy’s piece:
Around 9:15 this morning, green and yellow smoke appeared from the chimney of Carrow Road’s Lion & Castle and signalled the beginning of the end of Delia Smith and Michael Wynn-Jones’ tenure as majority shareholders of Norwich City Football Club.
If everything goes to plan, a general meeting of the Club’s shareholders, scheduled for Monday 2 October, will ratify the purchasing of 195,012 ordinary shares to a new company named Norfolk FB Holdings, LLC (“Norfolk”) – one led by Mark Attanasio.
Once/if ratified, it will bring the shareholding of the Attanasio group up to a round 40 percent – the exact same amount that will then be held by Delia and Michael. The remaining 20 percent will be held by the smaller investors and fans, including the Canaries Trust.
Where it gets tricky – reportedly the reason for the prolonged process so far – is that as the Attanasio group will have acquired in excess of 30 percent of the total share allocation, and because the Club is a PLC, under the Takeovers and Mergers Code there is an obligation for Attanasio to offer to buy out the remaining shareholders at the same rate at which he has purchased his new allocation.
The reason this is tricky is that it seems Delia and Michael have no wish to see their shareholding dip below 40 percent and the Attanasios have no desire, at this stage, to see theirs accelerate beyond 40 percent.
The desired position for both parties is parity but because neither party is able to vote on the resolution, plenty rests on the goodwill of the 20 percent whom they are entrusting to waive their right to sell.
I *think* that’s right – if it isn’t I trust someone will correct me in the comments below.
In addition to acquiring an equal share to Delia and Michael, this new arrangement (if ratified) would bring with it an additional seat on the board for the Attanasios, although it appears there’s an agreement in place – I’m not clear if it’s a gentleman’s agreement or an official one – that the Smiths and the Attanasios will not contest one another on ‘shareholder related matters’ when it comes to voting.
This arrangement – the 40/40/20 split – has, I believe, a timescale of three years backdated to January 2023, meaning that in that time there will be no muscle-flexing from the Attanasios.
It is also understood that in the same way Michael and Delia are keen for there to always be fan representation within the shareholding structure, those from the US are keen to retain this ethos.
In terms of what this means to the Club in terms of hard cold cash, the previously reported figure of £10 million looks to be way off. Instead, the figure being discussed is $6 million, aka £4.75 million.
This is, of course, on top of the £10 million that Attanasio has already loaned the Club in the form of C-preference shares, which can be converted to ordinary shares upon certain triggers – now within a six-year time frame.
I think/hope that just about covers it.
So, where does it leave us?
Well, if nothing else, it does signify that the Attanasios are in it for the long term. They appear content for this whole process to move at the pace of a snail as, of course, do Delia and Michael who have made it unequivocally clear they are not yet ready to take a back seat.
While it is clear the Attansios are officially cool with it all moving along ultra-gently, the pace is ultimately of D&M’s choosing.
But their time as majority shareholders, barring any hiccups, is nearing its end. This might not be the end game, but it’s the beginning of the end game.
And while it’s not the beginning of the Attanasio era either, we now enter phase two. And the clock is ticking on the three-year timescale during which time no aggressive moves will be made on either side.
No longer can we describe ourselves as majority-owned. And it’s no longer the gospel according to only Delia and Michael.
From October 3, some voices with an American twang will officially have a greater say in the running of our football club.
Only time will tell where that takes us.
What it means is we still have no investors (just passive owners), no investment and no likelihood of any change to the “self-failing” sorry I mean “self funding” business model. I think it’s called re-arranging the deck chairs on the Titanic! Whilst on-field we have moved on light years from last season and seem to now look like a well organised, tough, forward looking outfit, unfortunately off-field we still look like a turgid, outdated outfit with little signs of any real change in the next 3 years!
I’ll get told off for agreeing with this Chris. So I can’t possibly 😉
I’m not sure you should agree with him on this occasion. Mark Attanasio is steeped in the financial and commercial management of sports organisations. Whatever diplomatic words are used about his role, the thought of him as a 40% shareholder taking a passive back seat is ridiculous.
In his interview with us a while back, Tom Smith highlighted how MA was already injecting new ideas into the running of the Club. As a 40% shareholder, that input will surely only become more active. He represents the future of NCFC.
Fair comment, Stew. Can only attribute my frustration to it being the slowest, most painstakingly cautious takeover in the history of football 🙂
For all the right reasons, of course, before you remind me.
Understood. We can all agree it’s been a frustratingly drawn-out process – though much of the recent delay has been with the bureaucracy of the financial authorities.
Something else became clear today, on which we’ll learn more detail in due course. To a greater degree than we realised, Mark Attanasio has been financing the Club’s debt at much lower interest rates than we could have got elsewhere (thank goodness, with the trajectory of interest rates).
The quid pro quo is that he’s increased his share in the Club at relatively modest direct cost. An element of the deal is something I learnt about when I was involved in a management buyout of my old company: an exchange of debt for equity.
Whilst it’s marvellous that he’s injecting new ideas into the club, will he be injecting some hard cash as well? Doubtful, hence my view that this is just not going to make enough of a difference in the current state of football (money talks, ideas walk)!
If Mark Attanasio is drawn to a self-funding model, it’ll be a different breed from our existing one. I’d expect commercial opportunities to be better exploited – at least – as well as more imaginative funding avenues.
His purchase of the share issue immediately generates £6m free cash for the Club. Not mega-bucks by today’s standards in football – but every little helps, and I very much doubt it’ll be the last injection of new cash he oversees.
Hate to be the pedant, Stew, but am I right in thinking it’s $6 million as opposed to £6 million?
To be fair, I may (not for the first time) be wrong 🙂
Gary
So we now have a statement board – but do we really?
Smith and Jones 40%
Attanasio Norfolk Group 40%
Others 20%
All neat and tidy
Behind the scenes I suspect there will be a lot of haggling to get some of those 20% to sell their shares to either party no matter about the three Yr agreement, plus there is the small matter that Tom (Delia’s nephew) and his wife hold shares which at a push could see the Jones’ have a slight majority in making decisions.
Three years of uncertainty, no matter what those people who think they know. In reality they know no more than the rest of us, just adding 1+1 together and making their own conclusions.
The Trust and others might get first-hand information from the club but everyone of those 20% will read into that document what they want to, be it the Happy Clapper Brigade or the Disillusioned Brigade who want a clean break from the current ownership.
So is this good news that an general meeting is going to vote on an agreed share issue? NO. Will some shareholders think they’ve been done up like a Yarmouth Kipper? YES.
Did the Takeover Panel take so long to agree to dropping the Code be due to it being such an unusual request? But I forget that our present majority shareholders said she will do it her way.
Is it the beginning of the end? NO three years of uncertainty for the supporters in how the club will progress and three years of in-fighting for major changes on the board.
No ground improvement or additional capacity, just a struggle for money on team strengthening and we still have uncertainty who will fill the Sporting Director role.
Too many questions that answers will take three years or longer to answer.
Seems to be about the size of it. 3 more years of silence stagnation and no vision for the future. We have however suffered almost 3 decades of tinpottery another few are unlikely to break us.
Hi Gary
Long overdue.
The timescale was said to let Attanasio and his ‘Norfolk Group’ learn the ropes on how to run a club, which is strange as they already own a baseball Franchise.
Three years of possibly little ambition, many might think we will have to wait and see.
The interesting fact was the club got Attanasio to arrange loans at a more preferential interest rate in the US, hopefully we will not see a similar approach as the Glazers where they take loans out to provide resources to buy the shares and load that money onto the club.
It’s good to see some answers slowing emerging from the club – now let’s hope we can see some progress on the stadium and team building. I just hope that Attanasio realises that Norwich City Council will not finance the rebuilding of Carrow Road unlike what the Milwaukee Council are doing to keep his baseball team in the city.
Other US cities are trying to entice them to move the franchise with big promises.
The question should always be “is this what’s best for the club”.
My opinion is that a takeover drawn out over half a decade, is probably not in the club’s best interest.
So when all the dust settles what is the total value of the club?
The BBC’s take on Attanasio’s involvement
Analysis – ‘Potential end of an era’
Rob Butler, BBC Radio Norfolk
This is a very significant moment for Norwich City Football Club as, after 27 years, Delia Smith and Michael Wynn Jones may soon no longer be the club’s majority shareholders.
If, as expected, the allotment of shares goes ahead on 2 October, American millionaire Mark Attanasio and his group will match the 40% by the current club owners.
He’s already bought his way on to the club’s board and has an active role in the day-to-day running of the club. He attended his first Canaries’ away game recently when he saw the team draw 4-4 with Southampton, with his son Mike by his side.
It’s clear he wants a serious crack at English football.
Attanasio is already the owner of the Milwaukee Brewers Major League Baseball franchise, who are having a successful 2023 campaign.
He has been brought to Norfolk with Delia and Michael’s blessing – it’s evident that a succession plan is on their minds and this does feel like the potential end of an era at Carrow Road.
“Tom Smith (75) has today agreed to sell his shareholding to Mark Attanasio jnr (grandson of Mark Attanasio snr) as the Canaries prepare for a promotion push for the 2046 season in the Saudi Conference League West” 😉
Brilliant! – Although I doubt we’ll be invited to even the lowest reaches of the Saudi leagues by then as they’re heading into the stratosphere..
😅 I was told I’d commented on an article regarding the takeover today. I was baffled as I knew nothing about any takeover. I’ll have to get up to speed on what it all means
Haha… I did change the ‘new’ Chris to Chris (2) in an attempt to make the distinction 🙂
Thanks Gary
Thank goodness. MA obviously isn’t Saudi, but he, or his advisors, have an astute eye for talent and he has the money to back it up. Obviously I don’t expect Mo Salah to be turning out in green and yellow, but I think we have a real opportunity to become that loathsome mid-table PL side. I’ll take it, begrudgingly
With regard to the value of the new additional Attanasio shareholding…
The new share issue he has acquired is just under 200,000 shares at £25 each, so just under £5m direct cash.
As I alluded to above, the relatively modest price per share would seem to reflect other financial assistance he’s giving to the club, in particular taking on our debt. We don’t know the full extent of that, but it’ll become clearer over time.
No matter how much (or when) MA puts into NCFC, the reality is that the club will never be able to compete financially with the big guns, some of whom are loaded with very dubious financial backgrounds.
When a PL club can pay £40+ million for a player who has never started a PLgame & another can turndown a reported £150m for one of the their players ,it brings home what a financial cesspit the PL has become.
Delia is right in insisting on sensible financial stability & keeping the club close to its community roots is far more important than short term headline grabbing ‘success’.
When Sky & other media moguls tire of the PL in favour of a European or Saudi circus, the whole thing will implode with many long established clubs sinking into the pre-mentioned financial cesspit .