With a couple of weeks away from action it gives us a chance to catch up on what is happening off the pitch. Today marks nine weeks since the “car park presser” and in some quarters online at least, levels of impatience are increasing.
While we have had an official update from the club confirming that there is a process in place, the lack of updates from either the EFL or the HKSE hasn’t been conducive to a transparent process.
With this in mind I’ve tried to pull together information from as many sources as possible to offer some thoughts about where the club stands.
The EFL
One of the biggest hurdles to overcome in this process is EFL approval. Without EFL approval no takeover can happen, and while fan views of the toughness of the Owners and Directors Tests (OADT) might be less than complimentary, the truth is obtaining approval for the takeover is more complicated than just passing that test.
The EFL have been much maligned in recent years due to issues at various clubs such as Bury, Macclesfield and Derby but there is no doubt in my mind that they are becoming more vigorous in checking out potential owners.
The process itself remains opaque due to the infrequency of updates issued by the EFL but the basics aren’t hard to understand.
In any club takeover, the would-be owners need to show not only that they can pass the OADT but that they have the finances and business plan in place to run the club for the next two seasons.
In Blues’ case, it’s more complicated that that.
The way the Maxco takeover is structured is unusual in that Paul Richardson and Maxi Lopez are initially only buying 21.64% of the club but are also getting immediate control; with the remainder of the club to be bought within two to three years.
I have no doubt that the EFL will want to confirm exactly who will be in financial control of the club at all points, and what protocols are in place to prevent the possibility of any messy legal actions down the pike if disagreements occur.
On top of that, there is the issue surrounding the level of control Wang Yaohui (aka the elusive Mr King) has over the club which is currently being investigated by the EFL.
Despite news reports to the contrary, it’s my understanding that investigation does have some impact on the takeover bid by Maxco. What I don’t know is exactly how much impact the investigation has, or if it could anyway delay the process further.
Richardson and Lopez met with the EFL last week, but as expected very little has emerged from that meeting.
I’d mentioned on Twitter that I didn’t think there would be an immediate outcome from that meeting; the complications surrounding this takeover lead me to believe that the EFL will want to scrutinise everything as best as they can before approving it – be it finance, control or even the people involved.
A lot of this also depends on how the incumbent owners deal with the EFL.
Much news out there centres on the Maxco side of the deal which is to be expected as it’s easier for the press to get hold of them than it is to get hold of Birmingham Sports Holdings.
There has been some rumour that BSH haven’t been as quick as they should to give the required documentation in to the EFL. I personally would like more reassurance that BSH are treating the process with the same level of importance as Maxco.
A good example of this is the lack of updates made to the HKSE.
One thing that will be interesting is that BSH’s accounts for last season are due out at the end of this month and it will be interesting if anything about this proposed deal is noted in them, even if it’s in the “events after reporting date” section.
Finance
One of the things that has been flagged up in this whole process is the issue of finance for the bid; whether this is in place or not, where it’s come from and who is behind it.
Normally, I don’t think this would be much of a problem.
It’s common sense that anyone fronting a bid for a football club is not going to use solely their own money unless they are in the billionaire bracket. While there is more money washing around football than ever before, the levels of risk in owning a club are higher than ever and I don’t think anyone could be blamed for spreading that risk around.
The trouble is that with Blues it’s different.
In the last decade and a half, the club has been owned by a guy who was subsequently convicted of money laundering leaving the club in limbo during the three-year period between trial and conviction.
Even conviction of Carson Yeung didn’t bring an end to the saga thanks to a boardroom battle which left the club in an even worse position until the High Court of Hong Kong finally intervened.
Now the club is in a situation where there are very pertinent questions over who owns and controls it; not to mention where the money being put into the club has come from.
All that means that I can entirely understand why people may be concerned if finance has been approached to fund an initial bid.
After all, if there are issues with paying for the club up front then there are surely questions over how the club will be funded over the longer term – and again, just where that money is coming from.
Despite various reports out there in the press I can say hand on heart I have no idea where finance for the Maxco bid is coming from and that I have to personally give them the benefit of the doubt on it.
Despite that, I remain curious as to where they have obtained finance from.
Anyone who is willing to lend money for this project are going to expect some sort of return and I can’t see where that comes from in the short term. The team needs a lot of investment even now; the stadium is in a state of disrepair and the land isn’t worth much.
With Blues looking like the definition of a money pit right now I would expect any lender to extract strong guarantees from Paul Richardson or Maxi Lopez directly; which could in turn nullify any idea of spreading risk.
Due to the nature of how these things work, I doubt we will have any knowledge of what has been borrowed and what it is secured against until accounts have been published, long after completion.
This requires us as fans to “trust the process”; something we’ve not been able to do for a long time.
It would really be helpful if someone out there such as the EFL could release an update to give us some idea of a timeframe.
I’d heard mention back in July that there was a “long stop date” of September 30. This date is a bit like a deadline for the takeover; if it doesn’t happen by then both parties can walk away.
Before anyone says it, that doesn’t mean that the deal is dead if it’s not done by then; a long stop date can be easily extended if both parties agree to do so.
However, the fact that original date is now rapidly approaching should give everyone pause for thought of just how long this process has gone on – and how much longer it can be allowed to drag on for.