BCFC: Are OPL The Answer?

On Friday afternoon Matt Slater of the Athletic reported that Jeremy Dale was the front man for a consortium holding talks with Birmingham City for what was described as an investment deal.

Birmingham City FC

The Athletic article can be viewed at this link (behind paywall).

It’s brought about a whole host of questions from Blues fans about who is involved, what backing they have and how likely anything is to happen.

While I don’t have a crystal ball, I do have a little bit of knowledge of the situation and I figure the best thing to do is to answer the most obvious questions here.

Who are the people involved?

The bid is headed by two people.

Jeremy Dale is a former Microsoft VP and current CEO of Punk Rock Business. He’s also Finance Director of local business FP Tools. Away from business, Dale is a local boy and a Blues fan, who has been to a few games in the past and was at the Preston game last week.

Keith Pelley is a Canadian and is CEO of the PGA European Tour. He is also formerly President of Rogers Media and of Toronto Argonauts in his native Canada.

These two are co-owners of Often Partisan Limited (OPL) who are the consortium involved.

There may be other people who are involved at a management level but nothing has been confirmed publicly yet

Who is backing this bid?

As of yet, we don’t know and if I’m honest, I doubt we will until a deal is done.

It’s my understanding that this consortium have been seeking private equity backing for this bid, and I have no idea if they have been successful in sourcing this yet.

Is this an investment bid or a takeover bid?

This is where it gets thorny.

According to the club, it’s solely an investment deal; something that was repeated by Birmingham Sports Holdings to the Hong Kong Stock Exchange.

However, it is my understanding that this is a bid similar to the one Maxco tried to complete last year; ie a staged takeover where the 21.64% owned by Vong Pech’s Oriental Rainbow Investments and St Andrew’s are bought first with the remainder being completed over a longer period.

Like the attempted Maxco deal, OPL would get control of the club once the initial deal is completed.

It’s my suspicion that BSH are doing everything to not mention anything (including telling me that the club was not for sale) simply to not spook shareholders or indeed the stock exchange.

Why would someone invest in a bid like this?

The only reason really for an outside investor to get involved is to make money.

This makes this a risky investment, as realistically the only way money can be made is if Blues go up and there is absolutely no guarantee that can happen, even if money is thrown at it.

I would think the only approach that can be offered is one that involves rationalising the wagebill to a sustainable level, rebuilding revenues by reconnecting with fans and improving commercial deals; and most importantly clever recruitment to bring in players who can take the team forward while being able to sell off the odd jewel to keep the cashflow coming in.

All of that is difficult to pull off and requires far better leadership than we’ve seen of late from BSH. Dale and Pelley will need to convince investors that they are the people to do this.

Am I involved?

Normally, this would be a ridiculous question.

However, as the name of the consortium is the same as a website I ran (and still own) and some of the more excitable people online seem to think I’ve got skin in the game, I have to answer it.

I have no involvement whatsoever with the Often Partisan Limited consortium.

Do I think this deal will happen?

Like the Maxco attempt, I have serious reservations with respect to the way this bid has been structured.

It might be my natural cynicism, but I will not personally believe BSH are out and have no control of the club until every last share in the club is in the hands of an unconnected third party.

While I can understand that legal agreements with harsh financial penalties can be drawn up to make a deal “ironclad”, I’m also aware that those deals can still be broken if the party breaching agreement wants to take on the legal consequences of doing so.

To quote a lawyer of my acquaintance, anyone considering entertaining the staged deal is “bonkers”.

Likewise, I’m also concerned as to what might turn up during the due diligence period.

I have no basis for this concern other than my continued cynicism and I hope for the sake of any would be investor that my cynicism here is baseless.

Finally, there is the elephant in the room which is the EFL investigation into Wang Yaohui.

I have no idea what way that is going to go; I’ve heard suggestion Blues may just get a slap on the wrist and a fine, I’ve also heard someone suggest we’re in for a points deduction.

OPL must make sure that they are covered for any eventuality, to protect themselves.

On the positive side, there are far fewer red flags with this consortium so far in comparison to Maxco or Bassini. The lack of public pronouncements suggests a more careful and considered approach while Jeremy Dale would in my eyes be a far better bet at CEO than Matt Southall.

As with anything like this, I think we must be sensible and circumspect.

Last year showed the folly of declaring a deal was done before it was even close, with people’s hopes being raised far too high before being dashed over a horrible extended period.

This means we have to respect the need for privacy as this deal progresses and have enough patience to give it time to complete.

If this deal is to complete, I think it would be very difficult to do so by the end of the season.

There may be light at the end of what has been a very long tunnel. I personally hope for the sake of the club my fears are groundless and that this is truly the beginning of the end.