SIMON COHEN AND TOM SCOTT

[johnthegriff]

Regardless of share holding our Chairman has been throughout Peter Tom who's sixty years (approximately) service to the club is beyond doubt. At present we are told that despite interest from three potential investors no decision has been made to sell the club, we are merely testing the market. Those that liked the model in evidence at other rugby clubs, i.e. dependence on a single extremely wealthy owner are possibly getting what they want, with the vulnerability that goes with it.
The decline in our teams fortunes might have something to do with the appointment of Simon Cohen to C.E.O but may also be due to the injuries to Manu Tuilagi , Anthony Allen and to a lesser extent Toby Flood and the various mid-field replacements on our books.
Am I happy with our board? No! They sacked Cocker when we had never finished lower than fourth and only a few months after a Heineken semi-final but I have no doubt that they thought they were doing the right thing at the time. They and only they know who was responsible for decisions made that affect team performance as well as the day to day management of team affairs and they need to make sure that they are right going forward.
Speculation from outside and the uninformed is not helpful.

[Tiglon]

Regardless of share holding our Chairman has been throughout Peter Tom who's sixty years (approximately) service to the club is beyond doubt. At present we are told that despite interest from three potential investors no decision has been made to sell the club, we are merely testing the market. Those that liked the model in evidence at other rugby clubs, i.e. dependence on a single extremely wealthy owner are possibly getting what they want, with the vulnerability that goes with it.
The decline in our teams fortunes might have something to do with the appointment of Simon Cohen to C.E.O but may also be due to the injuries to Manu Tuilagi , Anthony Allen and to a lesser extent Toby Flood and the various mid-field replacements on our books.
Am I happy with our board? No! They sacked Cocker when we had never finished lower than fourth and only a few months after a Heineken semi-final but I have no doubt that they thought they were doing the right thing at the time. They and only they know who was responsible for decisions made that affect team performance as well as the day to day management of team affairs and they need to make sure that they are right going forward.
Speculation from outside and the uninformed is not helpful.

No one is doubting that some of those involved have been at the club for a long time, but how does that help the future of the club if they are making poor decisions now? They may have thought they were making the right decisions (I hope so!) but good intentions are useless to us if they result in failure - which they invariably have done for many years, to an ever increasing extent.

All teams have injuries, it's not an excuse.

Having one strong leader in control is not the same as depending on a wealthy owner, and you know it. Tigers is a perfectly sustainable business.

None of my criticism is a personal attack on those at the top. Most, if not all, have done incredible things for this club in the past. But, if we want a bright future we must start looking to it and not back at our glorious but now faded history.

Sorry, but there's no room for sentiment or nostalgia if we want Tigers to be a successful club again.

[ay2oh]

+ 1

[jgriffin]

The motive for my post is to point out that the responsibility for the sustained decline lies with the current controlling shareholder and management, and that this can only be reversed if there is root and branch change here. Blaming the various sub standard coaches they have appointed over the past few years misses the point.

The situation is worsened by the proposed solution to sell for £60m. First this would provide a distasteful reward for failure - my estimate is of 46% (c£27m) going to Tom Scott, giving him a c£18m profit, tax free in Guernsey. Second it would potentially build in destructive future financial obligations, taking money out that could be spent on rugby success and community support

I imagine, given current performance, a sale at this price is proving difficult. Assuming this is the case the following are possible outcomes
1. The current controlling management and shareholder move aside. No evidence of this.
2. The Non execs on the board engineer a change. No evidence so far, especially since they are in effect the appointees of the controlling shareholder
3. The company sells for less than £60m. Still has the danger of taking money out of the club, not putting it in
4. A financial crisis, possibly triggered by relegation. Not good.
5. The Club limps along, with change put off to another day, hoping something turns up. The current approach

The only satisfactory outcome is for the board to take responsibility and instigate root and branch change without burdening the Club with destructive future financial obligations.

Absolutely. BTW I did not mention the Channel Islands bit for fear of upsetting the Peter Tom supporters and crusties, two of them had a right go at me for suggesting he was ultimately responsible and likely to make some untaxed......

[Louis Cipher]

quote jgriffin
Why join now to post it? Motive?
quote

quote turnaroundspecialist
The motive for my post is to point out that the responsibility for the sustained decline lies with the current controlling shareholder and management
quote

Your response to these questions does not compute. Why now? All you are saying is something many fans have thought for years, not just now. Why join now to voice an old opinion. Given that, do we suspect there is a hidden motive?

[sam16111986]

The Club has implicitly accepted this by the decision to sell. The problem is that the sale price of £60m, at a time when the club is failing, is much higher than ascribed to it when it was successful. At a value of £60m, Tom Scott’s 46% shareholding would be worth around £27m, a profit of c £18m over my estimate of his investment at between £8m to £10m. Something is wrong here.

What are your sources for the investment of Tom Scott? I can only remember his name really cropping up when he offered to turn circa £5m of loan notes into shares a few years ago with him joining the board at a similar time. Given he paid that £5m for 16% of shares I'd be surprised if he managed to get 30% of shares for £3-5m unless he bought them considerably earlier. Unless I am misremembering of course, just curious.

[Turnaroundspecialist]

Press reports at the time the potential sale was announced in June (e.g. Independent, Leicester Mercury, City Am) confirmed Tom Scotts 46% shareholding.

[Mark62]

quote jgriffin
Why join now to post it? Motive?
quote

quote turnaroundspecialist
The motive for my post is to point out that the responsibility for the sustained decline lies with the current controlling shareholder and management
quote

Your response to these questions does not compute. Why now? All you are saying is something many fans have thought for years, not just now. Why join now to voice an old opinion. Given that, do we suspect there is a hidden motive?

There is too much technical language being used for this not to someone with a hidden motive

[Redstripeman]

The motive for my post is to point out that the responsibility for the sustained decline lies with the current controlling shareholder and management, and that this can only be reversed if there is root and branch change here. Blaming the various sub standard coaches they have appointed over the past few years misses the point.

The situation is worsened by the proposed solution to sell for £60m. First this would provide a distasteful reward for failure - my estimate is of 46% (c£27m) going to Tom Scott, giving him a c£18m profit, tax free in Guernsey. Second it would potentially build in destructive future financial obligations, taking money out that could be spent on rugby success and community support

I imagine, given current performance, a sale at this price is proving difficult. Assuming this is the case the following are possible outcomes
1. The current controlling management and shareholder move aside. No evidence of this.
2. The Non execs on the board engineer a change. No evidence so far, especially since they are in effect the appointees of the controlling shareholder
3. The company sells for less than £60m. Still has the danger of taking money out of the club, not putting it in
4. A financial crisis, possibly triggered by relegation. Not good.
5. The Club limps along, with change put off to another day, hoping something turns up. The current approach

The only satisfactory outcome is for the board to take responsibility and instigate root and branch change without burdening the Club with destructive future financial obligations.

.. my only surprise is that anyone believes the BoD cares. I am amazed you would want this bunch to attempt to right the ship.
Their plan seemed to be, to sell the club and leave Geordie holding the baby. Geordie was daft enough to say yes.
6. All Tigers supporters get down on one knee and pray that King Power takes over.

[sam16111986]

Press reports at the time the potential sale was announced in June (e.g. Independent, Leicester Mercury, City Am) confirmed Tom Scotts 46% shareholding.

Wasn't enquiring about the percentage of his shareholding, I was querying the valuation of his investment. You've said it cost him between £8-10m. The last 16% is thought to have cost around £5m.

[sk 88]

My maths on Scott:
Loan notes issued in 2009, took 6 years of interest at £250k a year. So c.£1.2m of interest there. Converted that into a stake of 15% shares for a cash value of £5.5m. He already owned 29.9% but we don't know what he paid for it. Let's assume that was in line with the loan note valuation, so c.£11m. He's now looking to sell his share for c.£30m for an overall c.£15m profit in c.10 years.

He owns 6,214,694 shares in Tigers or 45.73%.

If we achieve the sale price discussed he has made a stonking profit. No wonder the potential buyers are presumably trying to get him down on valuation.

[Turnaroundspecialist]

I am a lifelong Tigers fan and regular reader of this message board. I enjoy the debate here and find it a great source of information about the club and fans views. I have previously never felt I could add much to the debate, but given my business background, in this instance I felt it would be useful to share how I see the situation from a business performance perspective. I assure you, I have no other motivation than that i.e. to add to the debate my assessment and rationale of why root and branch change is necessary to reverse the decline of the club I dearly love, and enable it to flourish again.

[jgriffin]

I am a lifelong Tigers fan and regular reader of this message board. I enjoy the debate here and find it a great source of information about the club and fans views. I have previously never felt I could add much to the debate, but given my business background, in this instance I felt it would be useful to share how I see the situation from a business performance perspective. I assure you, I have no other motivation than that i.e. to add to the debate my assessment and rationale of why root and branch change is necessary to reverse the decline of the club I dearly love, and enable it to flourish again.

Thanks for stimulating a necessary conversation.

[Doghashadhisday]

Simon Cohen and Tom Scott effectively took control of the Club between 2013 and 2015, with Tom Scott becoming the effective controlling shareholder in 2015 with 46% and Simon Cohen being appointed CEO in November 2013. At the same time the remaining long time club men and ex players such as Peter Wheeler, Gary Adey and Roy Jackson left the board.

Since Simon Cohen and Tom Scott took control the club has been in almost continuous year on year decline in the three critical measures of league points, season tickets sales and profit as follows

Profit and Loss £k
Season P&L £k Decline
13/14………… 482
14/15………… 479……….... -3 down
15/16……….. -424 loss……. -903 down
16/17……….. -666 loss……. -242 down
17/18……….. -991 loss……..-325 down
18/19……….. -1,915 loss…..-924 down

Season tickets decline
Season Tickets Decline
13/14………. 14,945
14/15………. 15,239 ……… 294 up
15/16………. 14,775 ……… -464 down
16/17………. 14,500 ……… -275 down
17/18………. 14,027 ……… -473 down
18/19………. 13,530 ……… -497 down

League points
Season Points Decline
13/14…………..... 74
14/15…………..... 68…………… -6 down
15/16…………..... 65…………… -3 down
16/17…………..... 66…………… 1 up
17/18…………..... 63…………... -3 down
18/19…………..... 41………….. -22 down
19/20 run rate..18…………... -23 down

Such sustained deterioration across the board signals a failing Club which only a root and branch strategic, cultural and management change can reverse, as more of the same is highly unlikely to work.

The Club has implicitly accepted this by the decision to sell. The problem is that the sale price of £60m, at a time when the club is failing, is much higher than ascribed to it when it was successful. At a value of £60m, Tom Scott’s 46% shareholding would be worth around £27m, a profit of c £18m over my estimate of his investment at between £8m to £10m. Something is wrong here.

The danger is that the high price being sought together with continuing deterioration will make it impossible to achieve a sale. This could then lead to a default outcome of no change and thus continued deterioration, which can only be reversed by the controlling management recognising the failure and/or external pressure from other stakeholders to instigate change.

You say the club has been in decline since Tom Scott took control which is incorrect as he does not control the running of the club. Yes he became a majority shareholder which means he put in a lot of his personal money into the club. He is only an non-executive director so is not involved in the day to day running of the club. I am sure someone who has put in (to quote your estimate) of 8 to 10 million would want the club succeed and not fail.

The increase in the loss between 17/18 and 18/19 perhaps isn't a sign of mismanagement The wages rose by approx.half a million and Revenue was down by approx. half a million resulting in an increased loss.

Decline in season ticket sales is to be expected for several reasons, one the capacity is such that people now don't have to commit to a season ticket as it is easier to get a ticket and secondly we have not made the play-offs for a couple of years so there would be some decline in numbers. In fact the average home attendance was still above 20,000 despite the lack of success. The revenue in 18/19 was down on the previous year with a bigger decline in other revenue than that from the rugby revenue

In terms of points decline having multiple coaches over the last few years has not helped and last seasons decline was rather dramatic considering the players we had in the squad. Yes you can criticise the Board for the appointments made and the timing of changes but you would have to look at the executive directors which Tom Scott is not.

I also think that the biggest problem was bringing Matt O'Connor back and his refusal to bring on the youngsters. I actually think that the review undertaken by Pat Howard and the introduction by Murphy of youngsters like Heyes, Lewis, Reffell, etc will reap rewards in the future but will take 4 or 5 years.

In the meantime I think the supporters need to stand up and be counted. A drop in just a 1,000 in the average attendance will add approx £250,000 to the loss. The knock-on effect for a club like us with out a sugar daddy is that we would have to make redundancies and get rid of players which in turn would lead to a further decline. Relegation would be a disaster because if the average attendance fell from 20,000 to say 12,000 it would increase our losses substantially and we would in all likelihood not survive unless we got a Nigel Wray type of benefactor.

[sk 88]

Other than his £5.5m loan note conversion (for which he extracted c.£1.2m in interest payments first) he has not "put money" into the club, he has purchased shares from other shareholders. That is a very different thing. The club has also been announced for sale only about 18 months to two years after this conversion at roughly double the price he paid for it.

As for not being an executive director therefore not responsibile, 1) that is not how non-Executive directorships work, you are as responsible for the business as the executive directors legally, 2) he owns c.46% of the shares and given the large number of non-voting smaller shareholders de facto controls the company. So Peter Tom might be executive chairman but that is only at Tom Scott's behest.