The AFL has confirmed what many of us had already started to sense. Carlton’s heavily leveraged private equity assault designed to buy an AFL Premiership, is in a state of deep crises. Many stock market experts predict that the private equity partners backing the market premiership raid will soon lose patience and members and investors will seek to further reduce their financial exposure as a matter of priority.
AFL Chairman Mike Fitzpatrick today addressed a packed media gallery at the Melbourne Stock Exchange where he announced that there will be both a AFL and ASIC investigation into the goings on down at Princess Park.
“It sickens me, as a former Carlton player, that I must announce these investigations into yet another financial sham at the Carlton Football Club. I think the comparisons between Carlton and Facebook’s botched IPO are most apt but disturbingly frightening. It (Carlton’s corporate raid on a Premiership) is nothing but an embarrassment. Both Facebook and Carlton and their products and players respectively keep making fools of us. As consumers, investors and members, Facebook and Carlton encourage us to overshare our lives and dare to dream, even though we know we’ll live to regret it. As investors and members we are tempted to overbuy, and celebrate ahead of time, and we are regretting that, too.”
It is estimated that Visy Corp alone invested $100million in the Carlton initiative at the end of the 2007 season. Corporate valuation expert Mr Howard Eno from Flippacoin Equities was invited by The Boxer to value the current net asset backing of Carlton.
“After Sunday’s result Carlton’s value has continued to plummet. It is difficult to put an exact figure on it as supporters continue to return recently purchased merchandise, thereby making it tricky to value stock on hand. Also the Club has a number of claims to process for membership fee refunds, so a provision for loss must be allowed there. If forced, I’d estimate that the net value of the Club, as we speak, is something less than $500,000.00. Arguably the Club’s biggest asset Chris Judd, was fully depreciated over the first 4 years of his contract so he has a book value of zero presently. Based on his diminishing possession numbers I would expect him to be written off the books this financial year. His future with club is out of the midfield and into the books as a balance day adjustment. ” advised Mr Eno.
Mr Eno also agreed with Fitzpatrick’s comparisons to Facebook’s botched IPO. “Well yes indeed, Facebook’s IPO has slid from an opening of $38 to $28 on the Nasdaq. That is a whopping 26% in one month. Up until a month ago Carlton’s stock was also worth considerably more than it is today, but investors have clearly picked up that they are now truly on the nose.”
Allegations have similarly been raised about select few making money at the two organizations. Industry experts say that the only ones who made money out of the Facebook’s IPO was; Mark Zuckerberg, Facebook’s management and financial backers. Carlton’s beneficiaries include of course; Chris Judd, Stephen Kernahan, Greg Swann and the Board. No allegations have surfaced about players other than Judd receiving undeserved riches. Indeed sources close to Bryce Gibbs claim he can’t count and that he wouldn’t know what he is being paid but those sources expect that its less than the dole.
The SEC and the FINRA regulators have launched inquiries into whether some of the privileged Wall Street insiders were alerted to the company’s weakening financial projections, which led to their immediate selling of the stocks after Facebook got listed in Nasdaq. Likewise the AFL and ASIC are looking at the disclosures that Carlton and Judd made to Visy’s Dick Pratt before touching him up for some dough in 2007 and Carlton Members are now threatening a class action law suit claiming that the propaganda coming out of the club in 2007 convinced them that this was the real deal and they should jump on the bandwagon.
Fitzpatrick said that he expected both enquiries to be completed by the weekend of the Carlton bye. The AFL have meanwhile placed a trading holt on membership hand back’s and invited corporate administrator / insolvency expert (and Collingwood board member) Mark Korda of Korda/Metha to have a pick at the carcass.
Carlton’s current problem is of course not the first time that the Club have been caught out on financial irregularities. Several years ago it was reveled that the Club actually purchased the 1995 premiership by rorting the AFL salary cap whilst under the presidential watch of convicted white collar crim, “Shonky” Jack Elliot. On that occasion the AFL cowardly imposed future sanctions and declined to strip the cheats of the 1995 title.
In an ironic twist stock in traditional rivals Google and Collingwood bucked the market trend yesterday closing 4% higher on the back of better than expected weekend results.