This was always going to be the case. They made it clear it was an investment; they have no affiliation to the club unlike Patrick Cryne. We are unlikely to get to the premier league, see a big increase in gate receipts or be seen as a viable option for major sponsorship. Therefore, a club of our size can only give a return on that investment by selling players and/or land. This season so far has shown what this strategy really looks like but if you took a step back at the start this could clearly be foreseen. It’s sad but not unexpected. Foreign ownership will kill football in this country.
The experience I've seen first hand from wealthy investors in commercial turnaround communities with distressed purchases is that they use multiple compounding ways to extract personal revenue and return in tax advantageous ways. 1. Billing of work. Consultancy, management fees, whatever you want to call it, rarely salary. 2. Credit lines. Using credit to generate a commission or margin on interest rate compared to what they are borrowing at. 3. Asset disposal or hiving off of non core operations, functions, land, buildings etc. 4. Equity realisation at point of sale. The margin they make on share value from acquisition to ultimate sale. Its very very rare hedge funds and turnaround practitioners rely on just one form of revenue extraction, ideally preferring to have 3 of 4 to ensure they get some form of suitable return.
Questions to be asked re. Point 1. Are there 'consultancy fees' the board pay to third party companies whom they do own which could be masked as other expenditures or even agents costs on the financial accounts?
If there were to be consultancy payments to related parties (i.e. existing associated companies or the HK investment vehicle), and I want to be very clear I'm not saying there are (Americans are generally more litigious in nature!), they should be disclosed in a note in the UK based company accounts. Obviously, accounts are due every year and are completed and filed well after year end, so say a transaction occurred today, we may not find out about it until February 2021.