I can see you all thinking that this is going to be a piece about FFP / P&S and while that’s a factor, the truth is I’m not overly concerned by that right now.
The reason for this is because as I explained back in April I can’t quite see where the money will come from in the first place to bring players in.
Birmingham Sports Holdings should have paid off a large portion of their borrowings when they completed the last rights issue back in April which is good.
However, the dilution of shares is now probably as far as it can go without serious questions being asked by the regulatory authorities.
Recent share price movements suggest that now only very small trades can cause large percentage movement, which is not a good thing.
And while the holding company could start borrowing money again, it’s now similar to borrowing on a credit card while severely overdrawn elsewhere.
This means that different avenues need to be explored to bring in cash.
The noises from within the club since Monk’s departure have been bullish.
There seems to not only be a real desire to hold on to Che Adams, but to spend money in the transfer market.
To spend money, the club have to have money – which means fresh money coming in from somewhere.
If Hong Kong are restricted on what they can send, the question is where is this money is going to come from?
The sale of the stadium to another company in the BSH umbrella would suggest that there could be money coming in via that transaction but I can’t personally see how that is anything more than a paper transaction.
Ths is because the company that will be used to buy the stadium – Birmingham City Stadium Ltd – is also owned by BSH and would therefore need money from Hong Kong, which defeats the point.
If Blues are not going to cash in on players, then that suggests that they undertake another creative transaction to bring in extra cash.
There are already sponsor agreements on both the training ground and the stadium and Blues don’t own anything else of value that they can sell.
The only thing I can think that BSH have left would be to sell a stake in the UK parent of the club, Birmingham City plc to a third party.
According to documentation on bcfc.com, BSH owns around 96.64% of Birmingham City plc, with Trillion Trophy Asia owning another 0.24% directly. Birmingham City plc owns 100% of BCFC.
If BSH sold a small stake in Birmingham City plc, then that would be fresh income coming into the holding company, which could then be fed to the club.
Furthermore, I would think it’s possible that the person or company who bought the stake could then loan the money directly to the club.
Of course, whoever bought the stake would have to pass the Owners and Director’s Test (for what that is worth), and there are P&S issues that could crop up – but those are both obstacles that I think are passible.
So, the answer is it’s potentially possible the club could spend again this window.
However, in my own opinion I don’t think it’s necessarily a good idea.
The last two times we’ve tried to play more expansive football and spent transfer money the club has nearly got relegated.
The last time we tried it we did so badly it ended up costing us nine points the following season.
As much as I can see signing players would be a way to get the fans back onside, the pessimist in me thinks it’s not the answer.
The truth is it would be another huge gamble – the question is, if it would be a winning one
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