Question:
Hi Mike. Why pay off half and not more or less? What do you think to be the rationale behind this?
My answer:
The explanation is not simple but I’ve been saying it for a fortnight, please bear with me as I recant.
Radrizzani expected to pay £17m back to GFH and be done with them for good. 2 weeks ago, as the sale was about to be signed, they told him they still expected the extra payment agreed by Cellino as part of the murabaha agreement (an Islamic bank cannot get western interest in loans but can share in profits) even though the loan was not old enough to attract a significant interest payment they still expected a huge payment.
Why AR and his advisors were wrong-footed is unclear (was it missed under DD or did GFH renege before the contract was drawn up?) but Radrizzani had to announce a 2 week delay while he negotiated with them.
I gave the reason behind this delay as being GFH but it didn’t go down well with people who still believe that the deal was all signed up on 29th December 2016 and those who believe there has been no delay or recent negotiations.
My comments have, however, been confirmed later by YEP.
I published an essay here https://www.mikethornton.xyz/gfh-win-lufc-financial-battle-2/
The early paragraph about Cellino caused uproar. I stand by it as a professional statement of facts and even Radrizzani seems to agree with me today. My mantra in business is not to fall out with someone when you are doing well because you may need them when things change and I think that applies to Cellino (cue blinkered answers!).
A later paragraph that I wrote about the danger of the takeover failing is sensational, I agree. It was designed to be so. I wanted to whip up feelings against GFH.
Even the UK government recognises that negotiations can result in stalemate and no deal. I stand by that assertion even though it was unlikely, although if I worried people unnecessarily I apologise.
The end result of the GFH barney is a compromise that leaves the club worse off. Rather than spend the club’s free cash giving GFH a huge payday now and restrict the club’s rebuilding money Radrizzani has chosen to split the cash outflow.
Some now, some later.
Remember it is the CLUB who pay money to GFH not Radrizzani. My season ticket money is going to them.
This is not me being negative or doom and gloom.
This is me casting some light on the decisions real-life businessman/women make all the time. That’s what I try to do on social media.
I don’t know the exact details of the deal with GFH but I’m sure Radrizzani has reduced the cost to the club and I congratulate and thank him.
I can say a friendly goodbye to Cellino but I’d rather be saying goodbye to GFH.
MJCT 24th May 2017