Terry - it's not me, it's you
Normo's coming home
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I was away on holiday last week so only caught up with the news of the possibility of a backup plan for the Phoenix on my return. Forgive me my indulgence as I've missed much of the debate on a subject I feel passionately about so I think it is worth stating my case in one place. Like all breakups, in my mind there is only one place to start, and that is with some history.
To describe Terry Serepisos as a victim of the financial crisis conflates a number of relevant issues that are common to property developers the world over. Terry thrived in an era when credit was cheap and widely available, property prices were a one way bet and investors could borrow to buy apartments off the plans with their only concern being the yield.
Terry amassed a large but highly leveraged portfolio with a strong concentration in one market � Wellington. There is no denying that his ascent was rapid and involved a certain degree of chutzpah. In many ways he read the prevailing mood as well as anyone and emerged as a dominant figure from outside the establishment in the market in the Capital. However, the key issue with any highly leveraged investment is an exit strategy � that is where fortunes are made and lost. When it came time to cash out, Terry's business model has failed. Pressure from financial markets was unhelpful but ultimately not decisive � without the benign conditions of the early 2000s his investments and developments look far less prescient.
Reportedly, and according to his own calculations, his portfolio � shorn of several trophy assets � still encompasses roughly $230m of residential and commercial property measured against a cumulative debt of $200m. Suggestions that $30 overcollateralisation means that Terry has a significant future is fanciful. One, there are significant costs associated with this kind of disposal � lawyers, accountants, agents and valuers will all need to be involved and all will need to be paid. Two, in what is now a difficult market in Wellington the likelihood of him achieving full values across the board when he has pronounced himself as a publicly willing seller seem slim.
But even if he is able to exit cashed up, he faces a difficult future in a changed game. Terry relied significantly on the non-bank financial services sector for much of his development financing. To you and I that these are the finance companies, the majority of which are now failed, who have almost completely disappeared from the market. That is a significant gap in funding with a risk profile that banks are not willing to engage at that has not been replaced.
It is well known that Terry has not had any support from the major lending banks either in NZ or Australia for some time � WGA would not have been invited into the fold if traditional lenders were still dealing with Century City � and with the goings on of recent months and Terry's business history it seems unlikely that many credit committees would be looking to establish such a relationship. Even if he can bank $20 - $30m from the sale of his portfolio, without access to debt he has no future as a developer or property investor.
Currently the A-League business model requires owners to inject significant amounts year on year. One off items, like the transfer fee received for John McKain, may limit losses in any particular season. It cannot be a coincidence therefore, that as problems with Terry's businesses have magnified, the gap between best practice and the observed reality at Phoenix HQ have widened � without his funding the club is unable to operate as it should.
The current playing stocks are relatively threadbare just weeks out from the beginning of the season. The back room staff looks makeshift with an inexperienced novice the only backup to Herbert and no goalkeeping coach yet forthcoming � the Phoenix are currently operating with less staff than most NZFC franchises.
But it is in the non-playing managements that the differences are most stark. Jobs have gone and not been replaced. Where the experienced Tony Pignata was backed by a fulltime operations manager, commercial manager and media manager we now have the frankly out of his depth Nathan Greenham attempting to cover all of these roles alone. While the new broadcasting contract may alleviate some of these issues by increasing the funds distributed from the FFA, club owners will need to continue to bear some losses over the coming seasons.
It is clear that right now Terry is unable to fund the club in a manner that allows it do anything other than limp forward in survival mode. Other clubs are signing current Socceroo internationals, we're struggling to complete our squad with players from the Australian state leagues. Other clubs have commercial departments currently geared to sell memberships � we've put a few ads in the Dom Post and are hoping that the goodwill of the public does that job for us. Our official web page hasn't been updated for months � the main item still concerns Maceo Rigters, a triallist who has signed for one of our main rivals. New signings are yet to have their profile photographs taken for the new season. It is beginning to look amateurish.
Why are we as supporters willing to allow the club to be gutted from the inside out? We know that Terry will do anything to hang on to the club � when there were concerns that the end of Terry was the end of the Phoenix that was a crutch we could all lean on, at least he won't abandon us. However, when like now, what is best for the club and what is best for Terry are two different things it is far less clear why we should carry on backing him.
It will come as no surprise to those of you that have read my previous opinions on the matter that I am a strong advocate for a change in control at the club as soon as possible. The emergence of the newly monikered�Phoenix 5�creates for the first time a genuine option for a post � Terry era. Although currently we have no names in the public domain, it seems extraordinarily unlikely that Councillor Morrison would go public with such a firm proposal without the permission of those involved and the firm backing he describes. A source I have faith in has also independently confirmed to me the existence of the 5, although again without naming names.
At this early stage we are still unclear of their motives � are they genuinely interested in an immediate takeover of the club or do they see themselves merely as a backstop to prevent the loss of the club if Terry is unable or unwilling to continue. That is a question only they can answer but I acknowledge that until it is much of this is speculative.
Suggestions from various posters that if they care about the club the 5 should provide funding now are fanciful � right now the Phoenix are still Terry's show and presumably they are not interested in a co-dependent relationship with him, which for may reasons is understandable. In any event that is not how such relationships work, if you're writing the cheques you want a seat at the table.
Terry undoubtedly loves the club. He has sunk a significant amount of his own money into the Phoenix without any immediate prospect of a return on his investment. Other achievements are well documented, the Galaxy game, Phoenix players at the World Cup and the increase in playing numbers in Wellington. But let's not ignore the very real benefits that he himself has received. In the early years ownership significantly raised, and improved, his public profile in Wellington. Old enmities were in many cases cast aside as punters were converted to the cult of Terry � his standing as a prominent and respected Wellingtonian was established. And Terry actively encouraged this statesman like persona. It also allowed him to leverage publicity for his Century City group of companies.
The ultimate combination of the two strands was his acceptance of the presenting spot on The Apprentice. For those who now claim that he is a victim of a witch hunt never forget that he took that job dispensing business advice and judging young hopefuls on primetime TV knowing full well that there were problems with his own operations. He clearly enjoyed being on both the front and back pages � and there is absolutely nothing wrong with that � but all of that was a direct result of his ownership of the club. While some of his recent media attention and the focus on his failing businesses may be unwanted it is hard to argue that he did not encourage much of the attention he received outside the business pages.
None of this is intended to suggest that his motives for investing extended beyond a desire to help the club, the sport and the city. It merely illustrates that benefits have extended both ways during his period of control.
However, there are valid questions to be asked about his motives for continued ownership of the club long term � even to its detriment. Some may consider it uncharitable to even ask this question but when his property business is failing and he plans to exit the market completely is it any wonder that he wants to maintain control of the club? It is his only asset with any potential upside and is his only possible route to stay relevant in the city which he calls home. With new investment available he seems to be acting without regard for the future of the club.
Right now what is best for Terry and what is best for the club do not appear to be the same. That should at the very least be concerning and demands some explanation from Terry.
Firstly, how does he intend to fund the club in the short term throughout this season? This is not a novel point but it is worth repeating � with debts totalling $200m how can Terry convince his creditors that money otherwise available to pay down debt should be diverted to fund the Phoenix? Any big money signing are likely to be viewed with suspicion by finance companies with large, vulnerable debts that have an obligation to return funds to mum and dad investors who in most cases are already significantly out of pocket.
Secondly, how does he intend to fund the club after he rationalises his portfolio? Even if the optimistic assessments are true and he can clear $30m from the sale over the next 2 years what is his plan for the club? How long do we need to expect to wait, to be facetious for a moment, to see a fulltime CEO appointed? Nathan Greenham has held the position on an interim basis for 18months. In any event, having an owner worth $200m is very different to having one worth $30m despite the fact that Terry would still be a very wealthy man.
So I repeat, the only questions should be what is the best way forward for the club. Taking all things into consideration I cannot see a way forward with Terry at the helm. Even if no investors had been identified publicly I would still be advocating for a change of ownership. His support and passion are not in doubt, but ultimately more is required both now and in the future. We need a well funded playing staff to allow us to compete on the pitch. And we need an experienced and motivated administration to provide a framework for the club to operate in a way that will allow us to continue the strong position built up over the past seasons. We cannot continue just to be happy that we have a club at all and use that as a yardstick for measuring success or failure � the Wellington Phoenix can be so much more than that! But support needs to be harnessed, the negativity banished and the club needs to refocus and reconnect. There is no way that it can do that in its current state and I believe that it is time for a change � for us and for the club.
To describe Terry Serepisos as a victim of the financial crisis conflates a number of relevant issues that are common to property developers the world over. Terry thrived in an era when credit was cheap and widely available, property prices were a one way bet and investors could borrow to buy apartments off the plans with their only concern being the yield.
Terry amassed a large but highly leveraged portfolio with a strong concentration in one market � Wellington. There is no denying that his ascent was rapid and involved a certain degree of chutzpah. In many ways he read the prevailing mood as well as anyone and emerged as a dominant figure from outside the establishment in the market in the Capital. However, the key issue with any highly leveraged investment is an exit strategy � that is where fortunes are made and lost. When it came time to cash out, Terry's business model has failed. Pressure from financial markets was unhelpful but ultimately not decisive � without the benign conditions of the early 2000s his investments and developments look far less prescient.
Reportedly, and according to his own calculations, his portfolio � shorn of several trophy assets � still encompasses roughly $230m of residential and commercial property measured against a cumulative debt of $200m. Suggestions that $30 overcollateralisation means that Terry has a significant future is fanciful. One, there are significant costs associated with this kind of disposal � lawyers, accountants, agents and valuers will all need to be involved and all will need to be paid. Two, in what is now a difficult market in Wellington the likelihood of him achieving full values across the board when he has pronounced himself as a publicly willing seller seem slim.
But even if he is able to exit cashed up, he faces a difficult future in a changed game. Terry relied significantly on the non-bank financial services sector for much of his development financing. To you and I that these are the finance companies, the majority of which are now failed, who have almost completely disappeared from the market. That is a significant gap in funding with a risk profile that banks are not willing to engage at that has not been replaced.
It is well known that Terry has not had any support from the major lending banks either in NZ or Australia for some time � WGA would not have been invited into the fold if traditional lenders were still dealing with Century City � and with the goings on of recent months and Terry's business history it seems unlikely that many credit committees would be looking to establish such a relationship. Even if he can bank $20 - $30m from the sale of his portfolio, without access to debt he has no future as a developer or property investor.
Currently the A-League business model requires owners to inject significant amounts year on year. One off items, like the transfer fee received for John McKain, may limit losses in any particular season. It cannot be a coincidence therefore, that as problems with Terry's businesses have magnified, the gap between best practice and the observed reality at Phoenix HQ have widened � without his funding the club is unable to operate as it should.
The current playing stocks are relatively threadbare just weeks out from the beginning of the season. The back room staff looks makeshift with an inexperienced novice the only backup to Herbert and no goalkeeping coach yet forthcoming � the Phoenix are currently operating with less staff than most NZFC franchises.
But it is in the non-playing managements that the differences are most stark. Jobs have gone and not been replaced. Where the experienced Tony Pignata was backed by a fulltime operations manager, commercial manager and media manager we now have the frankly out of his depth Nathan Greenham attempting to cover all of these roles alone. While the new broadcasting contract may alleviate some of these issues by increasing the funds distributed from the FFA, club owners will need to continue to bear some losses over the coming seasons.
It is clear that right now Terry is unable to fund the club in a manner that allows it do anything other than limp forward in survival mode. Other clubs are signing current Socceroo internationals, we're struggling to complete our squad with players from the Australian state leagues. Other clubs have commercial departments currently geared to sell memberships � we've put a few ads in the Dom Post and are hoping that the goodwill of the public does that job for us. Our official web page hasn't been updated for months � the main item still concerns Maceo Rigters, a triallist who has signed for one of our main rivals. New signings are yet to have their profile photographs taken for the new season. It is beginning to look amateurish.
Why are we as supporters willing to allow the club to be gutted from the inside out? We know that Terry will do anything to hang on to the club � when there were concerns that the end of Terry was the end of the Phoenix that was a crutch we could all lean on, at least he won't abandon us. However, when like now, what is best for the club and what is best for Terry are two different things it is far less clear why we should carry on backing him.
It will come as no surprise to those of you that have read my previous opinions on the matter that I am a strong advocate for a change in control at the club as soon as possible. The emergence of the newly monikered�Phoenix 5�creates for the first time a genuine option for a post � Terry era. Although currently we have no names in the public domain, it seems extraordinarily unlikely that Councillor Morrison would go public with such a firm proposal without the permission of those involved and the firm backing he describes. A source I have faith in has also independently confirmed to me the existence of the 5, although again without naming names.
At this early stage we are still unclear of their motives � are they genuinely interested in an immediate takeover of the club or do they see themselves merely as a backstop to prevent the loss of the club if Terry is unable or unwilling to continue. That is a question only they can answer but I acknowledge that until it is much of this is speculative.
Suggestions from various posters that if they care about the club the 5 should provide funding now are fanciful � right now the Phoenix are still Terry's show and presumably they are not interested in a co-dependent relationship with him, which for may reasons is understandable. In any event that is not how such relationships work, if you're writing the cheques you want a seat at the table.
Terry undoubtedly loves the club. He has sunk a significant amount of his own money into the Phoenix without any immediate prospect of a return on his investment. Other achievements are well documented, the Galaxy game, Phoenix players at the World Cup and the increase in playing numbers in Wellington. But let's not ignore the very real benefits that he himself has received. In the early years ownership significantly raised, and improved, his public profile in Wellington. Old enmities were in many cases cast aside as punters were converted to the cult of Terry � his standing as a prominent and respected Wellingtonian was established. And Terry actively encouraged this statesman like persona. It also allowed him to leverage publicity for his Century City group of companies.
The ultimate combination of the two strands was his acceptance of the presenting spot on The Apprentice. For those who now claim that he is a victim of a witch hunt never forget that he took that job dispensing business advice and judging young hopefuls on primetime TV knowing full well that there were problems with his own operations. He clearly enjoyed being on both the front and back pages � and there is absolutely nothing wrong with that � but all of that was a direct result of his ownership of the club. While some of his recent media attention and the focus on his failing businesses may be unwanted it is hard to argue that he did not encourage much of the attention he received outside the business pages.
None of this is intended to suggest that his motives for investing extended beyond a desire to help the club, the sport and the city. It merely illustrates that benefits have extended both ways during his period of control.
However, there are valid questions to be asked about his motives for continued ownership of the club long term � even to its detriment. Some may consider it uncharitable to even ask this question but when his property business is failing and he plans to exit the market completely is it any wonder that he wants to maintain control of the club? It is his only asset with any potential upside and is his only possible route to stay relevant in the city which he calls home. With new investment available he seems to be acting without regard for the future of the club.
Right now what is best for Terry and what is best for the club do not appear to be the same. That should at the very least be concerning and demands some explanation from Terry.
Firstly, how does he intend to fund the club in the short term throughout this season? This is not a novel point but it is worth repeating � with debts totalling $200m how can Terry convince his creditors that money otherwise available to pay down debt should be diverted to fund the Phoenix? Any big money signing are likely to be viewed with suspicion by finance companies with large, vulnerable debts that have an obligation to return funds to mum and dad investors who in most cases are already significantly out of pocket.
Secondly, how does he intend to fund the club after he rationalises his portfolio? Even if the optimistic assessments are true and he can clear $30m from the sale over the next 2 years what is his plan for the club? How long do we need to expect to wait, to be facetious for a moment, to see a fulltime CEO appointed? Nathan Greenham has held the position on an interim basis for 18months. In any event, having an owner worth $200m is very different to having one worth $30m despite the fact that Terry would still be a very wealthy man.
So I repeat, the only questions should be what is the best way forward for the club. Taking all things into consideration I cannot see a way forward with Terry at the helm. Even if no investors had been identified publicly I would still be advocating for a change of ownership. His support and passion are not in doubt, but ultimately more is required both now and in the future. We need a well funded playing staff to allow us to compete on the pitch. And we need an experienced and motivated administration to provide a framework for the club to operate in a way that will allow us to continue the strong position built up over the past seasons. We cannot continue just to be happy that we have a club at all and use that as a yardstick for measuring success or failure � the Wellington Phoenix can be so much more than that! But support needs to be harnessed, the negativity banished and the club needs to refocus and reconnect. There is no way that it can do that in its current state and I believe that it is time for a change � for us and for the club.
Normo's coming home
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um ... any chance of an executive summary?
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Can't disagree with anything JD, great read. Terry has done a great job with the Phoenix up till now but new owners are required now.
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It's hard to argue against that
how was the holiday? Busy?
how was the holiday? Busy?
Auckland will rise once more
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um ... any chance of an executive summary?
Just read the last paragraph.. Pretty much a conclusion
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I repeat my contention that - whether or not a change of ownership is necessary for our medium-to-long-term survival, a question that I'm open minded on - to change ownership 4 weeks out from season kickoff would not only not get us big-name players or a fully staffed backroom, but would screw things up morale-wise (in the sense of putting Ricki and the players off their game with Dave Burgess and similar media figures getting all up in their faces) and make the season worse. If Terry needs replacing, let's do it in March.
Ramming liberal dribble down your throat since 2009
This forum needs less angst and more Kate Bush threads
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It's hard to argue against that
how was the holiday? Busy?
how was the holiday? Busy?
Long flight back and I'd run out of books - this happened...
Normo's coming home
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um ... any chance of an executive summary?
Just read the last paragraph.. Pretty much a conclusion
good point Maynard F,
on the basis of that para ...
I reckon, ride out this season under current owner (if possible)
then - if necessary - fans should mount a campaign for new owner(s) for HAL 12/13
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Excellent article. I have brought my season ticket for the coming season but once again we don't have a sorted squad and the current silence from the club is deafening. Thank you Terry but maybe it's time to let go and let the club move forward in a more positive way than what is currently happening.
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The other option is that it goes tits up one week into the season, that wouldn't be great for morale would it
Auckland will rise once more
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wait and see what comes out of this meeting Terry has tomorrow.
did you pick up any duty free?Founder
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First post for after a 6 month hiatus.
There are elements of the blog, and many of your previous posts related to this subject, that I struggle with. I think, from my perspective and with respect, you confuse being a stakeholder with being a shareholder. You convey a sense of rights and entitlement (e.g. "demands some explanation from Terry") where, I think, you have an interest - albeit passionate, but not a right.
Having said that I do not doubt and understand your intention.
For what it is worth my view on the matter is;
Terry has more than earned the right to decide when and how to end his association with the Phoenix.
I hope and trust that he will know when that time has come.
He can now make his decision in the knowledge that the club, which he built, will almost certainly continue and that many many people will forever recognise and be grateful for all he has done for New Zealand football and the city of Wellington.
I will not presume to tell Terry whether that time is now.
He dribbles a lot and the opposition dont like it - you can see it all over their faces. (Ron Atkinson)
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I repeat my contention that - whether or not a change of ownership is necessary for our medium-to-long-term survival, a question that I'm open minded on - to change ownership 4 weeks out from season kickoff would not only not get us big-name players or a fully staffed backroom, but would screw things up morale-wise (in the sense of putting Ricki and the players off their game with Dave Burgess and similar media figures getting all up in their faces) and make the season worse. If Terry needs replacing, let's do it in March.
I really do not agree with you, surely new owners who can fund the club properly can only improve morale? I don't think the players can be immune to it now, they read the papers and they look around, they can see the lack of investment - the off field stuff must be taking its toll. We desperately need a good news storyjames dean2011-09-04 22:20:55
Normo's coming home
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We've still got the best strips in the league?
"Phoenix till they lose"
Posting 97% bollox, 8% lies and 3.658% genuine opinion.
Genuine opinion: FTFFA
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good post you make alot of valid points however im very reserved about a couple things. when terry leaves and the welly team of 5 drop sack and bail out where does that leave us. in the sh*t and without a team. also doloras point makes sense changing ownership now would do more negative than good i dont see why our current team (with sanchez and bran) cant be competitive. we have some real good prospects. just need a bit of luck on the injury front. looking forward to cing pantelis, brown, sanchez (hopefully) amd ifill combining. its exciting even if ricki doesnt make that amazing signing everyone is waiting for.
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I repeat my contention that - whether or not a change of ownership is necessary for our medium-to-long-term survival, a question that I'm open minded on - to change ownership 4 weeks out from season kickoff would not only not get us big-name players or a fully staffed backroom, but would screw things up morale-wise (in the sense of putting Ricki and the players off their game with Dave Burgess and similar media figures getting all up in their faces) and make the season worse. If Terry needs replacing, let's do it in March.
Yeah lets wait to the end of a potentially dreadful season by which point the casual fans will have all but disappeared.
Are you telling me morale is good now? I actually think an end to this ongoing saga would BOOST morale, not lower it.
http://www.youtube.com/watch?v=qe_B5CzbTJo - Caceres winning penalty v Perth - footage from the Fever Zone
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good post you make alot of valid points however im very reserved about a couple things. when terry leaves and the welly team of 5 drop sack and bail out where does that leave us. in the sh*t and without a team. also doloras point makes sense changing ownership now would do more negative than good i dont see why our current team (with sanchez and bran)�cant be competitive. we have some real good prospects. just need a bit of luck on the injury front. looking forward to cing pantelis, brown, sanchez (hopefully)�amd ifill combining. its exciting even if ricki doesnt make that amazing signing everyone is waiting for.
Im sure if JD knows the names ok the so called 5, he will have reason to believe that is an unlikely scenario.
Great, thoughtful article JD.
Cheers
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A lot of you are forgetting that as the season progresses, expenses grow. Travel, accommodation, wages etc. If Terry has no money to prop the club up [$1m a year in his own words] what happens then? no wages paid, can't afford to travel, can't afford to hire Westpac..... big risk that FFA say "that's it" finish the season without them. From that position there might not be any turning back Secret 5 or not.
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JD
First of all an excellent summary� and you have asked the difficult question�
I also see and agree with Whiteboy in that Terry has earned something � however as JD has pointed out Terry has already received some advantages in owning the Nix..
One thing that will have FFA worried is next year sometime they negotiate the next media deal � FFA will not want the Nix in there current state ( see my thread )
http://yellowfever.co.nz/forum/forum_posts.asp?TID=15914
It is more than YF who want the Nix to be competitive, essentially we (Football) are heading into the most important year in Hals short history� FFA expect / need / require the Nix to get reasonable crowds and rate well at home� every club this season needs every other club to be competitive �. A huge effort has gone into re launching Hal� a new season format, lots of FFA management time talking to fans forums �. A new ad which I am told is very good �
Terry�s troubles could not come at a worst time for Hal ... this is one of those greater good questions ...
I wonder aloud about NZ football� take the Nix out of the A-League and the chances of NZ beating the fifth team in Asia to make the world cup is fanciful�. Their willingness to let the Nix fall on the surface is unexplainable but makes more sense if there are other backers�
My reading of the various media releases is FFA have been contacted and approve of the new owners as do NZ Football�. Meaning I guess everything is in place for a handover should Terry fail�
I guess its up to Terry but FFA will be watching closely as a poor performing NZ is not wanted in the year leading up too the media deal...
First of all an excellent summary� and you have asked the difficult question�
I also see and agree with Whiteboy in that Terry has earned something � however as JD has pointed out Terry has already received some advantages in owning the Nix..
One thing that will have FFA worried is next year sometime they negotiate the next media deal � FFA will not want the Nix in there current state ( see my thread )
http://yellowfever.co.nz/forum/forum_posts.asp?TID=15914
It is more than YF who want the Nix to be competitive, essentially we (Football) are heading into the most important year in Hals short history� FFA expect / need / require the Nix to get reasonable crowds and rate well at home� every club this season needs every other club to be competitive �. A huge effort has gone into re launching Hal� a new season format, lots of FFA management time talking to fans forums �. A new ad which I am told is very good �
Terry�s troubles could not come at a worst time for Hal ... this is one of those greater good questions ...
I wonder aloud about NZ football� take the Nix out of the A-League and the chances of NZ beating the fifth team in Asia to make the world cup is fanciful�. Their willingness to let the Nix fall on the surface is unexplainable but makes more sense if there are other backers�
My reading of the various media releases is FFA have been contacted and approve of the new owners as do NZ Football�. Meaning I guess everything is in place for a handover should Terry fail�
I guess its up to Terry but FFA will be watching closely as a poor performing NZ is not wanted in the year leading up too the media deal...
Socceroo/ Mariner / Whangarei
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Good read. You're right, the Phoenix need some sh*t sorting out, only 4 weeks to go.
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Wow.
That was an epic essay, JD.
It was Midfielder-esque in volume,
(In fact ..Midfielder just paled in comparison ^ ..who'd have thought?)
but overall a well stated and incisive observation of the state of the Nix at present and you pose some important questions we'd love to have answers for.
No disrespect JD but once again I too have to question your "sense of entitlement", as Whitby Boy ably put it.
I agree we are passionate committed fans, but we are not shareholders in Century City Football.
Ultimately its up to Terry to say when its over, whether we agree or not.
''''''''' ''''''''''' '''''''''''''
Looks like the signwriter's poised, brushes in hand, but is there writing on the wall?
The generously proportioned female vocalist may be warming up backstage but she's not frontstage and centre..yet!
That was an epic essay, JD.
It was Midfielder-esque in volume,
(In fact ..Midfielder just paled in comparison ^ ..who'd have thought?)
but overall a well stated and incisive observation of the state of the Nix at present and you pose some important questions we'd love to have answers for.
No disrespect JD but once again I too have to question your "sense of entitlement", as Whitby Boy ably put it.
I agree we are passionate committed fans, but we are not shareholders in Century City Football.
Ultimately its up to Terry to say when its over, whether we agree or not.
''''''''' ''''''''''' '''''''''''''
Looks like the signwriter's poised, brushes in hand, but is there writing on the wall?
The generously proportioned female vocalist may be warming up backstage but she's not frontstage and centre..yet!
Improving,,on the up, a work in progress from Italiano and the Nix. Bring on the bathroom bling in '24! COYN!
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There is no sense of entitlement - I just don't believe that Terry's financial investment means he can run the club in any way he wants.
My issue is that what is best for Terry and what is best for the club seem to be different - and if he is running the club in that manner then I think we are correct to at the very least ask how he plans to fund things given his failed business.
Taken to extremes would you allow him to play half of the home games around the country and accept that decision if he made it? Or would you say he has the right as shareholder to make whatever decisions he chooses?
My issue is that what is best for Terry and what is best for the club seem to be different - and if he is running the club in that manner then I think we are correct to at the very least ask how he plans to fund things given his failed business.
Taken to extremes would you allow him to play half of the home games around the country and accept that decision if he made it? Or would you say he has the right as shareholder to make whatever decisions he chooses?
Normo's coming home
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Excellent read JD.
My thoughts are that no one can deny the fantastic job Terry has done for the Nix, football, wellington, All Whites etc, but the continued stories of ongoing problems are now at the point of damaging the Phoenix brand with the"general public" who are not necessarily the hardcore football fans who populate this site. In the fickle world of entertainment it is not a good look.
I agree that a change in ownership would not be an ideal situation at this time, but continuing struggles and headlines such as seen in todays paper are far from ideal either. Personally, I think the time is reight now for something of an orderly change rather than a forced change through the season when the time may (or may not) come when another Creditor moves against Terry and he is all out of Rabbits to pull out of his hat.
Terrys love of the Nix is undoubted, but I just wonder now how much of that love is driven by ego?
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It's actually a lot cheaper to get credit now than any time last decade. The root cause of the problem is that his buildings are not paying for themselves, probably not even getting close. Office rent space is much cheaper due to the great drop in demand. The financial crisis has coupled with National taking a scythe to the public sector, especially in Wellington. Meanwhile there have also been a large chunk of new properties that were started before the financial crisis hit that are now up and running including brand new apartments and offices, and in prime locations.
Once that drop in rent took place the degree to which he was leveraged kicked in. Although credit is cheap he can't get any. Missing payments leads to high interest penalty payments. And there is no hint to an increase in demand for office space anytime soon. By the sounds of it he is barely treading water rather than slowly increasing his equity. If interest rates were to rise sharply, and they will rise reasonably soon, the effect on a 200 million dollar loan will be significant. This is the worst part of it, conditions are not going to improve in the near future.
All that said though, the Phoenix would probably not exist without Terry. If the Phoenix five were genuinely serious about this, they could always make Terry an offer. At the moment the vibe I get from them is they are there as backup, they want to see the Phoenix continue in Wellington but they are not that eager to get involved.
I think it is obvious the team is short on cash but it is not quite as bad as some are making out. Although Rietgers turned down the offer, the fact Ricki was able to offer something around 200k pa shows that there is money available to sign players. You could get 2 or 3 decent players for that amount. Most of the starting lineup from last season is intact or at least covered by new signings. If all the players improve as a team there is no reason why we cannot be fully competitive this season.
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JD You've said ...
"I just don't believe that Terry's financial investment means he can run the club in any way he wants."....
you know as well as I do this is not Terry running the club the way he wants.Given his predicament, he has few choices and those appear to be dwindling by the day.
Your extreme example of "NZ Phoenix" on the road?...I might not like it one bit, but if Wellington wasn't turning out in the numbers required and predicted earnings elsewhere meant the Nix coffers were likely to be much better off..that's business, and Terry's right to choose,imo. Here's hoping it would never come to that.
Yes I agree with you the dilemma between what's best for Terry and whats best for the Nix raises concerns.We hope all of Terry's decisions would ultimately suit us, but he loves the Nix, and surely won't let it go until there's no alternative.
In his shoes, we would probably be just as passionate and reluctant to let the Nix go too.
RedGed2011-09-05 09:21:34
"I just don't believe that Terry's financial investment means he can run the club in any way he wants."....
you know as well as I do this is not Terry running the club the way he wants.Given his predicament, he has few choices and those appear to be dwindling by the day.
Your extreme example of "NZ Phoenix" on the road?...I might not like it one bit, but if Wellington wasn't turning out in the numbers required and predicted earnings elsewhere meant the Nix coffers were likely to be much better off..that's business, and Terry's right to choose,imo. Here's hoping it would never come to that.
Yes I agree with you the dilemma between what's best for Terry and whats best for the Nix raises concerns.We hope all of Terry's decisions would ultimately suit us, but he loves the Nix, and surely won't let it go until there's no alternative.
In his shoes, we would probably be just as passionate and reluctant to let the Nix go too.
RedGed2011-09-05 09:21:34
Improving,,on the up, a work in progress from Italiano and the Nix. Bring on the bathroom bling in '24! COYN!
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RJMiller - yes senior debt is cheaper now but if you can't raise the mezz debt that you need in the market he operates in you don't get things done. Debt was cheap because underwriting standards were low and finance companies were willing to lend against 2nd, 3rd and even 4th mortgages. Yep, refinancing was his only hope - plus I still maintain that he lacked a valid strategy for deleveraging and ultimately cashing out
Redged - whether this is or isn't how he wants to run the club is immaterial - we have to judge him on how he is running it. I certainly do understand him clinging on, and I've outlined some of what may be his motivations above. That doesn't mean he is right to do so
Redged - whether this is or isn't how he wants to run the club is immaterial - we have to judge him on how he is running it. I certainly do understand him clinging on, and I've outlined some of what may be his motivations above. That doesn't mean he is right to do so
Normo's coming home
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...big risk that FFA say "that's it" finish the season without them. From that position there might not be any turning back Secret 5 or not.
No risk at all. The FFA can't afford to lose a game a week from Fox. If it went pear-shaped and no one else stepped in the FFA would at least fund the club to the end of the season. They have with pretty much every other A-league club at some point, and even though we're based in Wellington we're still an A-League club.
However, please don't take this refuting any other points in this thread. Just this one.
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A very well compiled read and this thread makes a lot of sense. Its not a post about how we are doomed so I hope the bunny boilers and doom merchants think before they post in this thread.
The reality is, is that the Phoenix are not the same club that they were 2 years ago in respect of off field staff, players, and finance. The reason for that is failure to keep up the investment in the club. There is only one person responsible for that and the reason he can't has been well thrashed.
If you worked for a boss and saw that the business was not in the same shape as it was two years ago and in decline with a threat of your job being lost (speculation), most people would go and look for a new job. I think some people do too much thinking with their heart and not their head. HAL is a business as well as a sport and the future of the Phoenix is a business decision, not an emotional one.
Terry is a good man from when I have crossed paths with him but like JD said, we hope Terry understands when its time to get out and that time looks to be coming quicker than we and Terry would have imagined. That is unfortunate but its an impending reality. The Phoenix 'Brand' has equity in it but there is a danger of losing that if the status quo continues.
Jeff Vader2011-09-05 10:31:26
The reality is, is that the Phoenix are not the same club that they were 2 years ago in respect of off field staff, players, and finance. The reason for that is failure to keep up the investment in the club. There is only one person responsible for that and the reason he can't has been well thrashed.
If you worked for a boss and saw that the business was not in the same shape as it was two years ago and in decline with a threat of your job being lost (speculation), most people would go and look for a new job. I think some people do too much thinking with their heart and not their head. HAL is a business as well as a sport and the future of the Phoenix is a business decision, not an emotional one.
Terry is a good man from when I have crossed paths with him but like JD said, we hope Terry understands when its time to get out and that time looks to be coming quicker than we and Terry would have imagined. That is unfortunate but its an impending reality. The Phoenix 'Brand' has equity in it but there is a danger of losing that if the status quo continues.
Jeff Vader2011-09-05 10:31:26
Grumpy old bastard alert
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Can't disagree with anything JD, great read. Terry has done a great job with the Phoenix up till now but new owners are required now.
so where are these new owners going to come from. No "smart" business man/woman is going to buy something that's losing over a million a season! The money is just not around - no matter what Mr Morrison says.
Queenslander 3x a year.
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It can only be a good thing if there is a plan b though. So hopefully the fab five are the real deal.
Whether that means Terry should step aside and give up what he has builtbis an entirely separate argument
Whether that means Terry should step aside and give up what he has builtbis an entirely separate argument
Allegedly
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um ... any chance of an executive summary?
tl;dr
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JD, a worthy essay. In essence you say that Terry is an archetypal yuppie. He will therefore suffer the fate of all yuppies (foundations on sand, smoke and mirrors etc.) and loose the lot. I can't exactly ever see him living in a caravan in a field, wearing his Nan's old cardigan, but the terms "property developer", over-leveraged", "failed", "where's that weird Indian loan gone?" don't (and can't) exactly inspire confidence in anybody, be it staff at the Club, fans, investors, the A-League or anybody else with even a passing interest. I also agree Terry has worked wonders and deserves absolute recognition for his amazing contribution to NZ football. Terry is so identified with the Phoenix though that his slippery downward spiral (for surely that is what we are witnessing) must surely mean that it is time forhim to walk away with some dignity, which he still can at the moment. I wish him well.
Nostalgia isnt what it used to be...........
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Not sure sure about the downward spiral, the sad reality is that it is a headlong plunge down a big black hole.
The home attendance of the first game will be an interesting indicator of the effect the whole mess has had on the public
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1. Terry won't let go until the FFA TV deal money comes through.
2. The Phoenix 5 will not pay Terry anything for the Phoenix because they know Terry won't last and they'll get it for free when FFA take the license away.
Easy....
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...or the FFA yank the license from him.
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Now I'm not arguing for a second that this is a good idea, but seeing as the FFA are devoted to keeping the Nix alive and in good spirits (a broken-down club with no-one caring about them is not their idea of a good time, cf. Knights and Furries)... we must suggest that every minute that they don't yank the licence from Tezza is a vote of confidence (that there is no superior alternative right now).
As I keep repeating but doesn't get picked up by the antis, Terry has been a model A-League club owner now and the FFA have loved him. They will only yank if they really decide he's in the poo, and they have confidence in the Fantastic Five. I do hope Rob Morrison et al. are making some plane trips to Sydney.
As I keep repeating but doesn't get picked up by the antis, Terry has been a model A-League club owner now and the FFA have loved him. They will only yank if they really decide he's in the poo, and they have confidence in the Fantastic Five. I do hope Rob Morrison et al. are making some plane trips to Sydney.
Ramming liberal dribble down your throat since 2009
This forum needs less angst and more Kate Bush threads
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I am wondering if Terry would be able to exit from the club, even if he wanted to. Due to the lack of publicly viewable accounts in NZ, we have no idea what the club's financial position is, but we can assume that the club has lost a lot of money over its existence, and that Terry has covered that loss. As has been speculated about elsewhere on the forum, the likeliest form of that contribution is shareholder loans. In his current legal situation, Terry possibly couldn't write those loans off, and if he had converted them to equity he would probably need to see something like that equity back from the sale.
Since we know that A-league clubs have almost no sale-able assets, it is especially unlikely that any purchaser would be interested in paying off the debt or meeting the equity value (it would be effectively a straight cash donation to Terry). I can't see any likely way of this being resolved without Century City Football being wound up and the license handed back to the FFA.
It would be nice to have information of the sort you see on The Swiss Ramble blog, so we know where we really stand.
Since we know that A-league clubs have almost no sale-able assets, it is especially unlikely that any purchaser would be interested in paying off the debt or meeting the equity value (it would be effectively a straight cash donation to Terry). I can't see any likely way of this being resolved without Century City Football being wound up and the license handed back to the FFA.
It would be nice to have information of the sort you see on The Swiss Ramble blog, so we know where we really stand.
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Actually... I just thought of something. Are the Fantastic Five actually offering to take over ownership of the Nix, i.e. the FFA licence, or are they just offering to fund it if Tezza can't, leaving the licence nominally in Tezza's hands?
Ramming liberal dribble down your throat since 2009
This forum needs less angst and more Kate Bush threads
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