Inside the West Ham deal | The Football Boardroom

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1:45Christian, Christian never a quiet day in football I mean someone who we both know well you know her particularly well you've worked with her Amanda Stavely has come in with this bid for Vanessa Goals 25.1 % shares. What does this mean to Daniel Kratinsky? What does this mean to David Sullivan? Trip Smith, he's got 8 % of the shares. What does it mean to West Ham United? Is this good news or is this boardroom turmoil? I think it's a bit of both. It's definitely turmoil in the short run and we should just run through what feels a bit like the Okie Koke because the last time we were together, it felt like Daniel Kratinsky was most definitely in and now it looks like he might be half in or indeed out.

2:35And I want to kind of try and explain to our audience what has been going on there. But I think potentially this could be very good news too. And I think we should talk in detail about why we think Amanda Stavely is interested in West Ham and what she would bring to the party. But just a quick, quick backtrack to remind our audience, we've talked about this before. When we last talked about West Ham, and this was in the wake of the major news around David Sullivan's off-field debacle, to be perfectly frank. Stories in the Times and also on Panorama. Yes, which obviously led to him very quickly resigning all his formal duties at West Ham.

3:22And we saw an announcement. Sorry, we have to stress he denies any wrongdoing. We should and we do. But at that time and in the wake of that announcement, we saw that Daniel Kratinsky, at the time, the 27 % shareholder of the club, stepping up and in a joint announcement with the Gold family, the Gold family being heirs to David Gold's longstanding 25.1 % stake in this club. That stake having been for sale for some time in the wake of his sad passing nearly three years ago, we heard that Kratinsky and the gold family and indeed other smaller shareholders were going to work together. And that Grotinsky was buying, I think, about 15 % of the gold stake, leaving them with about 10, taking him up to, I think, 43%.

4:15And it all looked like rather a neat and tidy solution to the question of who would be controlling and running West Ham. Just on that, he doesn't want to become a majority shareholder. That has been the understanding with him all along. So is that why he wouldn't want all of it and maybe to buy others out and to go over the 50 %? Well, it's a good question, and I think it's extremely pertinent in explaining what has happened this weekend with the arrival of Amanda Stavely on the scene. It did seem strange from the outside to many people that a man of Kratinsky's wealth and a man of his huge experience in buying and indeed controlling industrial companies all around Europe, that he would be sort of messing around at the sort of 43, 44 percent when the door seemed to be wide open for him to step up.

5:11But I think, Henry, there is a very important reason why he didn't do so. And this relates to the complex arrangements, the extremely complex arrangements that were put in place at the time of Daniel Kratinsky's original investment in West Ham in 2021. At that time, you will recall, the club was in effect jointly controlled by the Sullivans and the Golds. And in bringing Daniel Kratinsky in, he purchased a 27 % stake. The club was valued at£600 million. Many people at the time thought this would be a stepping stone to Kratinsky buying out Sullivan and Gold at a later date. and indeed the arrangements contemplated that possibility Henry because I am sure that in fact the issue that Kretinsky faces today is that when he signed up for that minority state with Sullivan and Gold he signed up to a set of arrangements that basically protected the Sullivans and the Golds from a scenario where he subsequently was going to buy more shares in the club And these so-called tag rights, drag rights and put rights basically mean in plain English for our audience, Henry, that if Daniel Kratinsky was to buy control of the club, i.e.

6:43buy the gold family stake in its entirety, taking him from 27 to over 50, he would have to buy out David Sullivan in full. and do so at a massive increase to the 600 million valuation that he paid at his original investment date five years ago. And this is a moment in time where, as we have pointed out to our listeners, the club is in the championship, facing significant challenges financially, significant challenges on the field. and I think nobody in the world would argue the club is worth more today than it was worth when Kratinsky bought a club on the cusp of European glory, riding high at the top of the Premier League.

7:30And so he can't and won't take control of the club today. And I think that's opened the door for Amanda Staveley's bid. What would he have had to have paid if it was perceived to be at the Premier League price? Well, it's not a question of the Premier League price. I think it's a question of a formula, literally a pre-agreed formula. If in future, i.e. now, you buy control of the club, then you're obliged to buy both the other shareholders out on terms that are a very significant profit versus the original investment. I'm guessing order of magnitude, a billion pound valuation, not a 600 million pound valuation.

8:13And that is the reason why Daniel Kratinsky has not bought over 50 percent of the shares today or one very good reason. Let's put it that way. Now, nevertheless, the interesting point is he seemed to have found a way, didn't he? with that arrangement with the Gold family, where he bought up to 43%, but they would in effect vote their shares with him jointly running this club. That looked to be a reasonable way forward, and something has changed. And what's changed is, I think, two things. Firstly, that wasn't an ideal solution for the Gold family. They were selling some of those shares, not all of those shares.

9:01And secondly, I think it's very obvious that Daniel Kratinsky in that situation would not have been paying top dollar for those shares from the gold family. Again, we talked about this in our previous episode. At a moment in time, immediately after relegation, immediately after a boardroom crisis precipitated by the Sullivan story, I think it's pretty clear that Daniel Kratinsky wouldn't have been paying top dollar for the gold shares. And so now a solution has made itself available where Amanda Stavely, through her investment fund PCP, is offering the gold, not a partial, the gold family, not a partial solution, but a full takeout of their 25.1 % shares at, and this is out there in the public domain, the 600 million valuation indeed that Kratinsky paid when he bought into the club those years ago.

10:00And I am sure, absolutely sure for our audience's benefit, that Amanda and PCP will have offered the same deal in recent days to Sullivan and to Kratinsky, because knowing Amanda as well as I do, she is somebody who happy to work with other people. And we'll talk about that in a second. But her plan A would always be to take full control of a business because she's an all in owner investor. she wants to be 24-7 owning the club overseeing the club rolling her sleeves up and getting involved on the football side in particular that's what she did at Newcastle everyone around Newcastle friends and foes would admit that and I suspect that if David and Daniel want to get you know Daniel get his money back at 600 David get out of Dodge then she would have happily bought both those out it's quite clear from public statements that David Sullivan has said he is not a seller at the moment, but we don't know what the Czech Sphinx is thinking.

11:03And we should speculate about that. Well, just on David Sullivan, I thought that the understanding from him is that he would only sell at a Premier League valuation. So Amanda Stavely is going to come in and offer effectively, what you say, valuing the club at more than£600 million. Would David Sullivan be interested in selling then? No, Amanda Stavely is valuing the club today at£600 million, which is the price that Kratinsky paid when he bought a minority stake five years ago. And the club was riding high. Now, Henry, it's fair to say Premier League club valuations have advanced significantly in the period since Kratinsky bought in, OK?

11:48but West Ham's fortunes have waned significantly over the same time period. Their fortunes are always hiding, they keep telling us. Well, there's no two ways about it. If you, you could, a reasonable West Ham fan could observe, couldn't they? And I definitely will observe that despite Kratinsky's stellar record as an investor and as a businessman and the fabulous amount of value he's created elsewhere in his investment portfolio. This is a guy with$10 billion worth of assets out there. It hasn't gone that well since he invested in West Ham. And as I say, that culminated in what felt to many like an almost inevitable relegation and real issues, frankly, on and off the field in the way the club has gone in recent times.

12:43And so he certainly hasn't been a good luck charm for West Ham fans. Let's put it that way. But when he stepped up four, five, six weeks ago, I thought this was his big moment to properly take control, move away from power sharing, move away from sort of boardroom consensus. Can we agree this? Can we agree that? and take control, put his own people in to run the club and get a grip. And that hasn't happened. And that's opened the door for Amanda, in my opinion. Okay, so you talk about Kratinsky. There is some sympathy for Kratinsky from the supporters. I spoke just before we started today, I spoke to one of the main fans' leaders.

13:28And I'll just briefly run through what he says. This is him quoting, the question for us is not about Amanda yet. It is about the way this has been handled. VG, Vanessa Gold, agreed a deal with DK, Daniel Kratinsky. That has been reneged on. DK knew nothing about this until the AS, Amanda Stavely, statement was made. Suboptimal for sure and throws our boardroom into chaos just when it needs to be stable. AS, Amanda, may be the best thing ever, but timing is everything and this is not the right time and right way things should have been pursued. Amanda Stavely has a great reputation amongst Newcastle fans.

14:08Of that, there is no doubt. If she and DK could work together, their respective groups could share the risk and take the club forward. But AS and DK both need to make their intentions clear, else otherwise demons move into the void of information. So that is, understandably, the fans wanting clarity, clarity, clarity in blue and transparency and do you think there is any possibility that I'm sure you'll raise your eyebrows of fans suggesting they want people to work together but do you think Kratinsky and Amanda could work together or is this just as you use the phrase all in from Amanda wanting to own the whole club 100 %?

14:53No, I think there's absolutely a route map here to them working together I think it could be great news for Daniel Kratinsky, frankly. Why do I say that? Over the five years that he has been a financial investor and contrary to what people thought in 21, including, I suspect, David Sullivan and David Gold, there's been no sign whatsoever in that five-year period that Kratinsky actually wanted to take control of West Ham, buy a bigger stake and run the club as the controlling shareholder. And I would argue that the events around the end of the season, both the relegation and then the Sullivan story, this is a sort of crisis management moment.

15:42What else could he do but make a public statement, try and find a way ahead with the other shareholders, the Gold family, and be seen to be a responsible custodian of his investment in the club at an absolute crisis point. And fair play to him, but he didn't have a lot of choice. And as I say, I think that subsequent to those good faith attempts to work together with the Gold family to grip the situation and move forward through what I previously described as the most challenging summer in the club's history, financially and football-wise, I think the technicalities and complexities of the deal he originally did and the extremely complicated shareholder arrangements that were put in place to protect David Sullivan and David Gold at the time of that investment, I think they are defeating Kratinsky or at least are a significant obstacle.

16:47As I've said, he is not going to put himself in a position where there is any risk that he can be forced to buy the whole of the club at a huge price versus what he paid on the way in. And so Amanda comes along, Henry, and I feel that actually this could be the way forward. Amanda and her people, as I say, they're all in. She's not somebody who's got multiple other investments around the world where she's going to be distracted, completely and utterly unfocused. Look at what she did at Newcastle United. She got the deal done and she's a brilliant deal execution person, by the way. She closes deals and that's a hell of a compliment as a former deal guy.

17:35OK, and but she's also somebody who rolls her sleeves up and gets involved. And all of us in football saw how hands on she was at Newcastle, managing that investment on behalf of Piff, who she who she effectively brought in as the new owners of that club after Ashley. She'd be the same here. She'd be saying to Kratinsky, look, let me and my people take over the day to day running of football. One thing everyone could agree on that David Sullivan has made it quite clear in public that he has stepped back from all football duties, all executive responsibilities. He is now just a financial investor hoping to get his shares out at the right time and future for the right price.

18:16I would suspect when they're back in the Premier League, when he can command a higher price for those shares. He isn't the solution. Kratinsky has not shown any appetite to run the club on a day to day basis. What better scenario for Kratinsky than having somebody putting their money where their mouth is, writing a check for a lot of money to the gold family to buy that 25.1 % stake and saying, and by the way, I'm sticking my hand up. We will oversee day to day management. And if it goes well, OK, and I'm happy for you to tell me whether you think it will. Let's look at the track record at Newcastle.

18:51But if it goes well, a rising tide lifts all boats. Amanda's work will lift the value of Kratinsky's shares and Sullivan's shares. She's got a huge incentive to do that because she's just paid 600 million for a quarter of the club. That's a big aligned interest in driving the value of the club. I like it. I think that's a way forward. It's very interesting when the story broke and when the Times carried it. They also carried a statement from Kratinsky's spokesperson who said this does not help the stability of the club. He felt that the June 13th agreements and the sort of concord effectively with the Gold family brought stability, co-chairs and all that in the wake of the David Sullivan allegations.

19:39So absolutely. But what you're saying is that she could actually be a uniting figure. We saw that at Newcastle United when she was in there. She was a conduit between the dressing room and the boardroom. She obviously listened. She's very good at listening and then making decisions. And fans and players and managers really like that. They like to know that there is someone in the boardroom who listens. You will have experienced that down the years. And fans really liked her. And it was quite interesting. And obviously the timing is completely coincidental in terms of anyhow leaving Newcastle United.

20:14But part of the narrative in the background were a lot of fans saying, well, he lost such an important ally in Amanda Stavely when she and Murdad, her husband, left Newcastle United. And that ability to have someone who he could talk to, bounce ideas off, and also, obviously, she worked very closely with Piff. Do you think that it's not beyond the realms of possibility if Amanda Stavely did take over that at some point Eddie Howe could be at West Ham when some of us were hoping he would actually be the next England manager after Tuchel? Well, there's no vacancy right now. In fact, I think fair play when this crisis broke just after relegation and all parties around the boardroom found common ground on the idea of persuading Nuno to stay, where many commentators, including me, thought naturally that he would leave, not fancying an EFL challenge.

21:17And so, you know, that is, the ink is barely dry on that, I think, bold agreement. And there is no current vacancy, but absolutely 100 % we need to be, we need to be very clear on this point that I think it was never the same for Eddie at Newcastle after Amanda Stavely left. They worked together extremely well. You know my strong views on this. I think having a single focal point in the board, whether it's the owner, whether it's the chief executive, whatever they're called, one person who is identifiable as the leader, who is responsive to the manager and the sporting director, who can make quick decisions, who listens, as you say, Henry, processes, provides an alternative perspective, often a financial perspective.

22:08but fundamentally goes and gets the job done. That's what she did in her time at Newcastle. It was rebuilt in her and Eddie's image with meaningful progress in terms of that club's results. They'd been dwindling in the lower half of the table for some time, despite, you know, an ever-changing guard of managers and real improvement was brought. It didn't quite go to the next level and there were other issues. I'm sure, you know, sooner or later we'll get into those. But fundamentally, that relationship between Amanda and Eddie was a key driver of success. So no doubt about it, if she was a reference shareholder at West Ham United, A, and there was a vacancy, B, Eddie would be absolutely top of her list of phone calls to make.

22:58But we're not there yet. And I think there are other people-related issues that if I was a West Ham fan, I'd be focused on right now. And I think we should give some credit as well, Henry. OK, because one of the things the West Ham fans will be feeling is, is this deep uncertainty in the boardroom as to ownership impacting the short term? And by which I mean this summer window and getting ready for business in two weeks time when the championship starts, by the way, with an incredibly challenging opening set of fixtures. and I would say so far the scorecard is day-to-day been pretty damn good over the summer.

23:41In terms of the sales because we referenced in our previous podcast on West Ham, they needed to generate money. How much do you think they would have made in terms of Fernandes obviously got sold for 85, Somerville for 55, Freddie Potts, slightly surprisingly, they let a player like him go for 10 million. How much would that generate to go into the FFP pot? Well, I think those three. We said in our previous show when we did some deep forensic analysis on the numbers that the club was going to need at least£150 million of cash in. And we felt at the time that would mean six, seven, maybe eight players having to leave.

24:23They got to£150 million of proceeds on those three sales. certainly Somerville and Fernandes at much higher prices than most people expected, despite having their backs to the wall, despite being relegated. So fair play. Whoever was in charge, and I think the interim CEO has to get a pat on the back here, good deals, well executed quickly. And the profit on those, I estimate, Henry, because profit is not the same as the price. OK, they paid about 40 for Fernandez. They had a sell on, I think, to Southampton. They paid, I think, 25 for Somerville. I'm not sure there was a sell on. Potts is all profit.

25:08My numbers are they made at least 70 million profit into the FFP account. So, again, tick on the sales early in the summer window, and I think there'll be more to go. There are bids around one or a few others. And my suspicion is, by the way, another bit of credit where credit's due. Having kept Nuno, and we don't know that deal, but we speculated on that deal, H, that we thought probably Nuno might have agreed to a salary cut, but a big bonus to bring them back up. Well, to everybody's surprise, they did a similar deal with Gerard Bowen soon after that. And I thought, again, bloody fair play.

25:48I was really impressed to see that. He will be not only the best player in the Championship, obviously by far the best paid player in the Championship, rather like his coach. And I like that. That was the owners, whoever was in charge, saying, one thing we can all agree on is we need to get straight back out of this league if we keep our manager and our best player. That helps. So that's the tick in the box side of the account. But there's a but and you can sense the but. Yeah, well, just before you get onto the but, which I'm sure is a taxpayer but, just on Jarrod Bowen, it's a big tick to his loyalty as well.

26:24it probably would have been an interesting conversation with his father-in-law if he did start packing his bags and heading off back to a Premier League club so fair play to him, we don't see much loyalty in football so I think that's fantastic, I mean I've interviewed him I'm sure you've met Jarrod Bowen he's a very genuine guy so there's sort of echoes of Mark Noble in there with him obviously he came from outside the club but yeah, I think fantastic also I think a huge tick in the box for West Ham fans? I mean, 55 ,000, was it 55 ,000 season tickets? Okay, there'll be EFL prices. 50, I think.

27:00Is it 50? Well, it's fantastic. Fantastic achievement. Nobody saw that coming either. But coming back to your butt, is it to do with the stadium? No, actually, before I get to the stadium, firstly, I don't want to paint the rosiest of rosy pictures, okay? because there are many West Ham fans who would say, come on, guys, this is messy. And what fans really care, there ain't many football fans, let's be clear, who celebrate well-executed player sales of our best players. Yes, I'm sure they were chuffed as hell to see Gerrard stay. But what fans care about is who's going to line up on the first week of the season.

27:39And there are still holes. And there are, therefore, question marks on the ins side side of the summer business. And we talked on this show about the need to have a specialist in recruitment. They brought the fella in from FC Copenhagen, Niels Coppen, young, up and coming, not sure the core knowledge and expertise of finding players EFL ready, okay, and not just finding them, but actually landing them when that end of the kind of talent market often has an opportunity to join, for example, a newly promoted team in the Premier League. You know, that's kind of the pool that they're fishing in. And it ain't easy with an Ipswich or a Coventry's there saying, look, similar money.

28:28And by the way, we're in the Premier League, you know, so not easy. Specialist market knowledge, not a market that West Ham have been having to fish in for quite a long time. I'm a little bit concerned about the rate of ins to get this team battle ready for the start of the season. And that leads back to, I really think what Stavely and her people bring is a proven track record in the recruitment marketplace that would really help get that side done. And that goes to timing, Henry, because I think the biggest issue where Bordrum meets day today where this news about Amanda Stavely potentially hijacking Kratinsky's purchase of the gold shares and buying them herself, where that raises big question marks is to timing.

29:18There's a lot to be done in the month of August. If these so-called preemption arrangements, and let me just explain for those who we have members of our audience who aren't finance gurus. What does that mean? It means that Gold Family have announced we have reached agreement on a price with Amanda Stavely to sell our shares for X. But there is a period where the all existing shareholders are allowed to say we'll buy them for the same price. OK, that's the deal that is on the table. And that means that Amanda has no certainty today that that preemption won't take place. In other words, a deal might not happen.

30:05And my strong feeling is Kretinsky's had five years to figure out whether he wants to be in control of this club, buy more shares, take it on, lock, stock and barrel. And it's not clear he really wants to. And he's got other fish to fry. He's got the post office. He's got all these business around you. In my opinion, when someone shows up putting a value on the club, the same as you paid five years ago, Daniel, despite the fact that you're now, you know, a 27 % shareholder in a championship club that's got a lot of issues. I think she's putting her money where her mouth is. She's got a demonstrable track record of improving the performance of a football club.

30:46She wants to do the work, roll her sleeves up, get in the business. I think that's the way forward. And don't waste three, four, five, six weeks figuring out what you're going to do, because by then you might have missed out on opportunities in the summer window. I hope, in other words, that common sense prevails here. And these big dogs, you know, get in a room and figure it out a lot quicker than what the document says they're allowed to take to look at their navel and figure out what they want to do. But seriously, on that, even removing the pre-emptive and the 30 days, how quickly could this go through if both sides were willing and Kratinsky says, I understand Amanda's track record is good.