BCFC: The End of Maxco

News broke on Friday afternoon that 136 days after holding a conference on the Kop Car Park to tell fans the deal was done, Paul Richardson and Maxi Lopez have pulled out from their attempt to buy Birmingham City.

St Andrew's taken 26 December 2018

The news came via a short statement made to the Birmingham Mail, which can be found at this link.

I can’t say I’m surprised that the takeover has failed.

People will remember I’ve been sceptical since the get go due to the nature of the deal, and the longer talks dragged, the more I thought that they would end in failure.

There are some big questions now about the short, medium and long-term future of the club that need answering.

Although I cannot claim to know everything, I have put this article together to try and offer some thoughts based on the bits I know and the people I’ve spoken to in the last 48 hours.

Why have Maxco pulled out?

I think the first thing we need to understand is just why Maxco have pulled out of takeover talks after nearly 20 weeks of discussions and a lot of money invested into the running of the club.

The statement given to the Birmingham Mail states that once Maxco got a proper chance to examine the books at the club there was a change of heart in how much they thought the deal was worth and that Maxco were not able to renegotiate their offer.

If we take this statement at face value, it at least proves why it’s important for any potential bidder to do due diligence before completing the deal.

There is no detail as to what made Maxco want to change their offer, and I suspect that Non-Disclosure Agreements will ensure that information won’t come out, at least officially.

I’ve seen some people online opine that this is some kind of hardball stunt from Maxco to force the owners of BCFC back to the table, but I think that’s just pissing in the wind.

Indeed, I’m warily sceptical of the reasons given by Maxco for pulling out.

While I believe that there is some truth in their statement, I’m not 100% convinced it’s the whole truth.

I’ve had it confirmed from three sources – including Maxco – that the long stop date for this deal was Wednesday 30 November. It seems awfully convenient that Maxco have pulled out of the takeover a couple of days after that has elapsed.

I also have had information from the far east that BSHL wanted to finalise this deal by Christmas. With the long stop date passing and no sign from the EFL of budging on approving the deal, I can easily believe that the owners killed this deal as much as Maxco pulled out.

Take into account that the January transfer window is almost upon us and it makes sense that both sides needed something in place, if only to prevent more confusion over who exactly was funding transfers.

Obviously, that’s all up in the air now and as one can imagine, there are a lot of Blues fans now wondering what is going to happen to the club financially.

Who will fund the club now?

The big question on many people’s lips now is just who will fund the club until a new takeover consortium steps forward; especially considering the widely held impression that BSH no longer wish to fund Blues.

There are some immediate issues on the horizon that need thinking about.

For example, when the news broke of Maxco pulling out on Twitter there was immediate concern from many fans on what will happen with the ongoing stadium repairs.

I’ve not yet had official word from the club, but it’s my firm belief that the repairs will continue as they have been during the world cup break at least.

Although there has been lots of questions over who is paying for the repairs of the stadium, the simple answer to that question is that the club are paying for it.

The question of who is giving the club the money to pay for the repairs is a more complex one and I’m not convinced that Maxco were the ones funding it.

Likewise, I don’t think the transfer window will be that much different as it would have been under Maxco.

From my previous discussions with Paul Richardson it was clear that Maxco were working on making the club sustainable, which in turn would mean financial prudence in the transfer market.

I get that many fans are annoyed because they thought that there was a genuine chance that the club could push for promotion based on the way the team has played before the World Cup break, but I think we also must be realistic in our expectations.

After all, we don’t have to look far into the club’s past to see the long-term damage overspending can cause.

In the longer term, I think we must be patient and see what happens with regards to finances.

Although there has been no official confirmation as to what sell-on clause there may be in the Jude Bellingham deal, I’m fairly confident in saying that a big move for Bellingham would see Blues receive a fair chunk in change which could make a lot of difference.

However, there may be bumps on the road in the immediate short term.

What happens next?

Although I’m pretty confident in saying that there are other interested parties out there looking at buying Blues, I wouldn’t expect any movement from a serious takeover bidder in the short term.

Sure, we might see Laurence Bassini make another grasp for the limelight, but I hope Blues fans understand me now when I profess my utter disdain both for his antics and for those who enable him to make a public fool of himself.

I’ve long held that the deal on the table was a shit deal, and I cannot see anybody coming in to resurrect it particularly after Maxco made public their attempts to renegotiate.

Any serious bidder is now surely going to hold off until BSH gets more desperate; preferably to the point where even the listing isn’t worth the bother.

I’ve long held that anybody interested in buying the club will want to do so from a position of power and with Maxco no longer funding things there is potential for that to happen.

Indeed, the rumour from the far east is that Wang Yaohui aka the elusive Mr King does want out and wants out badly enough he no longer cares for the listing.

The question now will be how long it will be before Paul Suen and Trillion Trophy Asia feels the same.

The immediate short-term problem for the owners is going to be Maxco wanting their money back from their funding the club for the last few months.

I can’t pretend to know the ins and outs of how that has been achieved, but my gut feeling is that the owners aren’t going to be quick to hand back money to Maxco; which could turn into a protracted messy legal situation.

I’ll be honest, I suspect the club is going to be in for some short-term pain following Maxco pulling out.

However, as much as I have come to think Richardson’s motives at least were somewhat pure, I also think this was the only ending for this takeover.

I’m going to spend the next few days trying to get official comment from the people involved, so that I can try to offer a more complete idea of what happened and where the club goes next.

It’s also worth noting that Birmingham Sports Holdings have their Annual General Meeting on December 30. As a shareholder in BSH I’m entitled to attend and to ask questions of the board. I’m not entirely sure how it will be possible for me to do that but I’m working on it.