Terry - it's not me, it's you

JD - great bit.�

JD - great bit. 

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.

I prefer to let Terry struggle through it for now. The ideal situation is he comes through all this better than ever.

Ok,just that he gets through this then...the extent to which he comes through it wasn't really the point...

Great Post JD. Totally agree with what you say. The Club, comes first. We are a very young club. If you look at football clubs overall owners come and go, players come and go, coaches the same. Its the Club that has to endure.

Before you start a new thread please check pages 2 and 3 of a forum or use the search function at the top of the page to see if such a topic already exists. Often what you are asking will already have been covered somewhere else. Please stick to one thread per topic, this is especially important around comments on each match. Also, read the FAQs, your answer may be there.

Before you start a new thread please check pages 2 and 3 of a forum or use the search function at the top of the page to see if such a topic already exists. Often what you are asking will already have been covered somewhere else. Please stick to one thread per topic, this is especially important around comments on each match. Also, read the FAQs, your answer may be there.

http://www.stuff.co.nz/sport/football/5574530/Phoenix-coach-owed-well-over-100-000

it's getting murkier by the day it seems

exactly, supposition, some lawyer has made a random comment and the NBR launches into a Terry owes Ricki $100k, seriously some of the reporting around the nix has been shonky at best - guess work, rumours, where are the actual facts with proof to support the claims???

Read the passage again. Terry had the opportunity to deny that money was owed, but expressly didn't take it- ergo, money is owed.

wonderfully entertaining all this speculation about Terry's finance may be (particulaly) for the local rag that calls itself a newspaper) . but to be honest Im guessing that terry is not the only local businessman that owes money...so why no reporting of these people?  I realise that teryy may be high profile with the Phoenix and previous Tv show but f**k im so over this now. Im sure that the Doom post must troll this forum to check the reaction to their articles and im sure that all the angst submitted by us feeds this beast and keeps it going. whether im right or not makes no difference this is my last post on this subject as until i hear something from the club im so over the Doom post spoutings however legit they may be