Are IOR set to pull the plug on Pools...?

[perseus]

"IOR are going to run Pools into the ground, it's obvious they're working on an exit strategy"

I have a genuine question regarding this quote and the whole idea of an 'exit strategy'. Before I ask the question, it's worth knowing that the most common exit strategy in business (particularly in businesses based in Europe and America) is a trade or sale to a 'partner' known as a 'trade buyer'.

One way on doing this is to have a great business, making loads of money and you simply sell it on to a bigger player (who wants it) in exchange for a shed load of cash. Simples.

However, if your business isn't doing so well, you either shut it,(and lose all your money invested over the years) or ...........you look for a 'trade partner'.

In essence, what you do when brokering a deal like this, is try to find a potential partner that may open up the door to a 'larger project'. The idea of 'mutual collaboration', that will benefit a range of investors, is usually the carrot dangled in an exit strategy of this nature.

The company who 'wants rid' basically disposes shares, assets and liability on the new investor or partners, having convinced them that it (the project) will be mutually beneficial to all involved.

In short, you 'pass the bomb'.

There are usually two ways to go about finding a potential 'partner' in an exit strategy like this. One is to exaggerate the profits and limit the potential weak points of the company, before selling it on (such as the situation going on with Royal Mail).

The second option is the one every Pools fan should be aware of.

That being, you do the opposite. It's very common for a company to manufacture an 'exit strategy' that involves demonstrating that they have invested a hell of a lot of money in the company (multi millions usually) but that they're no longer in a position to do it.

Usually, they no longer WANT to do it, but it's more often than not, easier to give the impression you CAN'T afford to.

In doing so, you create the potential for an outside investor (or a group of them) to think.... 'We're getting a bargain, they've spent loads on it, we're getting it for x........ and they've spent Y, let's buy it, let's take over the project and aim that they had, but now can't afford'.

Since 2007, until December 2011, IOR's value as a company has plummeted from plus £6,179,803 to a negative value of minus £8,628,374. That means the 'value' of IOR has fallen by £14,808,177, nearly £15 million quid....... in 4 years.

At the same time, Hartlepool United Ltd, the subsidiary of IOR, has seen its 'value' on paper plummet from minus £2,406,101 in 2007 to minus £10,487,495 by 2011.

The means IOR's value has dropped (on paper at least) by nearly 15 million quid, and the 'value' of Pools as a club has dropped by about £8 Million quid. That's a hell of a lot of money to have technically 'spent', in 4 years, on a piece of scrub land on the coast of Hartlepool that they don't even own.

All the while this has been going on, various figures have been bandied about (mainly by IOR) about the value of the club to the town, and the towns wider economy. It creates jobs, the economy of the town needs it, it's worth millions and millions of pounds a year etc etc. These figures have also, to some extent, been backed up by the council, or at least members of it.

So back to this exit strategy and the two options open to IOR. The first, as I said, is tempting a buyer into the belief that it's making loads of money and you just want out in exchange for a sack full of cash..... in Pools case, that's obviously a non starter.

So, the second option, is to show you've invested LLLOOOOAAADDDSS and to give the impression to an outside investor (or group of them) that perhaps it's potentially tempting to get involved in some kind of 'mutually beneficial plan'.

As, I said earlier, this could be some kind of 'collaborative project' that benefits a whole range of groups and investors.

IF, (big IF) you can convince enough people (or a group of people too stupid to realise) that it's a 'mutual project' benefitting everyone, it's very easy to palm off all of your 'toxic assets', worthless shares and overall liability acquired over the time you've been financially liable for the business, and offload it onto the 'new partners'.

If you're really clever, in doing so, you can also take control of the bit(s) of the 'new venture' that actually have a tangible residual value (for example the title deeds to any land or buildings with a lease hold value), whilst at the same time, palming off the bits that are worthless on the new mugs, (sorry 'investors').

(On a big scale, think of what the banks managed to convince the government was a good idea).

Before I go any further, I'm not talking shape shifting lizards here, UFO's or the idea that 9/11 was an inside job. All I've detailed in this post are the two most common 'exit strategies' which are undertaken by virtually ANY business (with significant monies invested) when it comes to moving on to pastures new.

This sort of thing happens time and time and time again. The businesses involved may vary widely, but the principle of the two kinds of exit strategies mainly undertaken, stays the same.

You both fatten it up and flip it on for a quick profit, or you starve it to within an inch of its life whilst at the same time dangling a very attractive carrot to outside investors greedy enough to think there's a bargain to be had.

FFS Perseus, you're taking a very long time before you ask the question you said you were going to ask right at the beginning of this long and boring post....

Oh yeah, I suppose I am, sorry about that..... So... the question.......

Mill House Master Plan anyone?

[steveL]

Sorry Perseus but I just don't see it. There was never any formal financial consortium connected with the Masterplan. In a lot of ways that was one of its chief flaws in that nearly all of the money was expected to come from the public sector.

[no6bus]

you mean by investing reasonable salaries for players expected to improve the team (and what a disappointment that has turned out to be) and another excellent season ticket offer they are planning on giving it away. no sorry i dont buy it.
on saturday ken hodcroft didnt look like a man whose masterplan is coming to fruition at the final whistle.

[SRMoore]

If it is true then supporters may want to keep a close eye on what Pompey are doing
http://www.telegraph.co.uk/sport/football/teams/portsmouth/9680223/Portsmouth-fans-set-to-buy-League-One-club-as-administrators-give-conditional-green-light.html

[no6bus]

There's a big difference between giving it away and a 'trade partner/buyer' exit strategy. I've seen all this before, most people accept that pools is a vehicle for tax write downs? Do you support that belief No6?

yes i would go along with that

[no6bus]

Over the years ior have used the football match day experience to wine and dine people , it is a global company so can't see the need for relocating like dr martens did, they moved to produce cheaper goods although the last couple of seasons haven't been great the support from ior is still there. If we weren't in this poor run of form this wouldn't even be being discussed

[no6bus]

When ior announce they are selling pools I will worry, in the meantime it is a bigger worry , when will we win again?

[no6bus]

It is a hypothetical question, if they decide to relocate how do we know they will offload pools. If they decide on such a move they certainly won't consider our feelings so my thoughts on a relocation are irrelevant.

[for fawkes sake]

I should think the fans are a little more occupied with the recent results than pontificating about hypothetical scenarios. I don't believe that the team are anywhere near as poor as recent results would suggest but they seem to have lost faith in themselves. If the new manager can lift their spirits, I see no reason why they can't in turn lift themselves out of their present predicament.

[steveL]

The concern would be if any relegation drop triggers something with IOR