Archer Capital Gone

[Axeman444]

The more I hear from Adderton, the higher on the Flog scale he achieves

[Mixer]

Originally Posted by Axeman444

The more I hear from Adderton, the higher on the Flog scale he achieves

as far as I am concerned he's already achieved ultimate flog status.

[one five five]

25 years ago the fanbase didn’t like him anyway as he was involved in Super Touring....

Everyone bangs on about how Supercars is a business.... why WOULDNT anyone want a businessman like Peter Adderton owning it?

[Tourer]

Originally Posted by one five five

Everyone bangs on about how Supercars is a business.... why WOULDNT anyone want a businessman like Peter Adderton owning it?

Fair point and no question that he's been very successful with his main business.

There'd have to be concerns over his flakiness in public comments and whether that transfers to flakiness in running a motor sport business I guess - he's regarded as being pretty off the wall in motor sport circles.

He himself doesn't think that he can make it work with a minority shareholder group, so to me he ain't the right person if he genuinely believes that.

Not convinced that he'd be less good than Archer though - they simply don't seem to have come to terms with the business and what it needs, even after all these years - at least Mr Adderton has an appreciation for the sport.

[S griffin]

We need someone who knows what’s best for the sport. Otherwise there’s no point. Someone who can make it profitable without alienating the fans. Hopefully Peter can do that, fingers crossed. There needs to be a fair trade off between sport and business and at least Peter seems clued in with regards to the sport

[Mixer]

Originally Posted by one five five

Everyone bangs on about how Supercars is a business.... why WOULDNT anyone want a businessman like Peter Adderton owning it?

Because he's another Gore-type who puts his own interests before that of the entire sport.

Can you remember how competitive the Super Touring series was when Adderton was an owner?

[cavvy]

Recent discussion about Archer Capital & Supercars:

https://www.theaustralian.com.au/bus...41e9ee32aa6e50

... Supercars .... where private equity outfit Archer Capital is trying to offload its majority stake.

Archer has an information memorandum doing the rounds for the competition, which does roughly $20m in annual pre-tax earnings.

Four or five parties have kicked the tyres on the investment, in a process being run by Miles Advisory.
But the glory days are well and truly over in terms of Archer’s value.

It paid $180m for its 65 per cent ....
One source said it might only get $30m-$35m, but another thought it could double that.

As always, complicating matters are the owners of the Supercars teams themselves, who own just about all of the remaining 35 per cent of shares.

There are said to be “drag and tag along” provisions in the contract between Archer and the teams, effectively meaning the teams may have to be bought out at the same value that Archer would theoretically sell its shareholding at.
That is said to have proven to be a stumbling block in previous attempts by Archer to sell out.

[S griffin]

That's interesting. Supercars is a great series, I just it continues to be in the right hands. I don't want it sold to the wrong hands. I just hope a company that understands the sport is part of it.

I can see why Archer are selling, they aren't getting the profit. It seemed they would do well when they bought it and now they need to get what it can out of it. We'll see

I just hope the Supercars team owners have their say in it as well, they don't want their series sold down the river to some company that don't care about the sport

I just hope it gets resolved in good time and with what is best for the series and the teams. The series is great, but it needs a sustainable future. There should hopefully reasons for optimism

[GTRMagic]

Originally Posted by S griffin

I can see why Archer are selling, they aren't getting the profit. It seemed they would do well when they bought it and now they need to get what it can out of it.

$20m annual return off a $180m investment?
11.1%pa pre tax is pretty handy when term deposit rates are mostly sub 1% pa
And yes, the return gap is at least partially reflective of the additional risk in running an enterprise & creating something rather than letting money die in a bank…

How many boats can you waterski behind??

[S griffin]

It shows they didn’t think it through. And it seemed such a good idea at the time. Time for them to go. It’s clear they didn’t do enough and should focus their energies elsewhere

[Average Punter]

11.1% return might make Archer happy.
I'm not as good at numbers as you GTR but does that mean the 35% share that the teams own returns $10.7m/year?

Not a lot across that number of players for the cash they tip in...
And that's before Mr Frydenberg takes his slice.

[Casper]

I always thought that someone had pointed out to them how CVC was leveraging their investment in F1 and they could do the same with SC. CVC for those who did not follow the story gained an income from F1 but the biggest game for them was borrowing against the asset and then selling F1 with the debt. In other words they got the money, flogged the F1 franchise so they did not have to pay it back and they got the money they sold F1 for. As others pointed out having a loss making division can be very handy at tax time especially if it was never going to have a big ROI anyway. We sold a company at a big loss and never shed a tear.

[Sandgroper]

Very Very Interesting read in speedcafe !

[Tourer]

Originally Posted by Sandgroper

Very Very Interesting read in speedcafe !

Here's a link to the read you're referring to. Interesting times ahead by the sound of it.

[Casper]

They do talk it up....five groups vying to buy it......More likely a bit of interest has been shown and a bit of editorial name dropping done to make the article more appealing. Looking from the outside in, where they get the potential sales figures from is a mystery, the numbers don't gel at all from an ROI perspective and the uncertainty of motor sport in the future. I think someone is dreaming TTTT, supporting that is the trouble they have had unloading it in the last few years.

[cavvy]

Originally Posted by Average Punter

11.1% return might make Archer happy.
I'm not as good at numbers as you GTR but does that mean the 35% share that the teams own returns $10.7m/year?

Not a lot across that number of players for the cash they tip in...
And that's before Mr Frydenberg takes his slice.

Articles read (to me) the return on Archers $investment.

A very astute business man in Garry Rogers handed back his RECs, & the likes of the owners of Tickford are very successful.

Archer have had the 'for sale' sign out for some time, its prepared to take a loss, Supercars is as attractive as it can be NOW.

[Sandgroper]

With sale, means change...maybe, especially if 1 group grabs it and gives it a boost.

[one five five]

Originally Posted by Mixer

Because he's another Gore-type who puts his own interests before that of the entire sport.

Wasn’t Gore considered an asset to have involved in the series when he had a team?

Originally Posted by Mixer

Can you remember how competitive the Super Touring series was when Adderton was an owner?

Factory backing from Volvo, BMW, Audi & Hyundai over the years. Attracted international entries, strong backing, and Championships that went down to the final round in four of the six years he was involved.

[cavvy]

Originally Posted by Sandgroper

With sale, means change...maybe, especially if 1 group grabs it and gives it a boost.

Thats why Archer Capital bought it & the likes of Coch0 left the building.

[Casper]

No one would put personal money into it and if they did they should seek mental health check ups as soon as possible. The level of financial backing that can be found will determine the selling price.

[cavvy]

Originally Posted by Average Punter

11.1% return might make Archer happy.
I'm not as good at numbers as you GTR but does that mean the 35% share that the teams own returns $10.7m/year?

Not a lot across that number of players for the cash they tip in...
And that's before Mr Frydenberg takes his slice.

Here is quote from Archer Capitals founder 12 months back:
“Supercars has been a poor investment for Archer Capital, and we make no secret of that,” Mr Wiggs told The Australian.


“We probably purchased it at the top of the market. And we’ve faced difficult structural issues since the day we acquired it,” he added, referring to a drop in broadcast rights, corporate sponsorship and a difficult market for ticket sales.

https://www.theaustralian.com.au/bus...5b8b1e188be8c7

[GTRMagic]

Originally Posted by Average Punter

11.1% return might make Archer happy.
I'm not as good at numbers as you GTR but does that mean the 35% share that the teams own returns $10.7m/year?

Not a lot across that number of players for the cash they tip in...
And that's before Mr Frydenberg takes his slice.

If you read more of the articles about Archer in the series, that they replaced the executives in their team responsible for managing the Supercar investment more than once in their investment lifetime, and the boss of the Archer business needed to take personal interest and control himself, suggests the vision was either not what was executed, or the executives were the wrong people to be managing a sporting property.

You can buy an asset at the very top (or beyond) of its valuation and still make a metric shed load of dollars from it. That Archer didn’t talks to a lack of performance in a number of places, in their own management group, the Supercars executive with the revolving door of leaders and so on, and impacts of teev deals and COVID19 and any other sporting franchise in the marketplace.

Someday someone will write a book… maybe Mr Cochrane should…

The teams handing back their RECs.. like GRM.. you have to remember that foundation teams like them reportedly paid less than $10 grand for them. So not a huge give back.

And if the teams had $10m a year to split amongst themselves, in 24 RECs that’s like $400k each… which it was said to be in the “good old days”. Are they back? I see many cars not resplendent with commercial partners, and patrons with alleged deep pockets they may not like to dip into.. money has to come from somewhere to keep the singing & dancing alive….. maybe….

[Casper]

I think Mr. GTR just agreed with me. I doubt it is saleable at just about any price but someone may hang out to the last minute to see where the bottom is and then decide. This must make the REC holders a bit nervous and some may bail out but time will tell on that one.

[Matt K]

"Speedcafe.com has learnt of at least one more serious party in the mix, that being a well-funded American sporting consortium."

I can't help but think it's Penske...

[Alan52]

Originally Posted by Matt K

"Speedcafe.com has learnt of at least one more serious party in the mix, that being a well-funded American sporting consortium."

I can't help but think it's Penske...

Why?He already bought a series that has been a financial basket case since Tony George did the great CART/IRL split and burnt through half the Hulman family fortune.Penske has an attachment to the Indy 500 race and thinks he can make the rest self sustaining.
He has left the building here largely because he could see the future and doesn’t think it looks good.
My guess is Archer is moving into the bargain basement category.The contenders seem to be a US private equity company with Skaife as the Australian front man and the Morris/Adderton bid which I think might have Roland Dane hidden in the mix.
The former might be stupid enough to bid more than it’s worth and what is Skaife doing in there?Remember he took HRT to the point of bankruptcy in the short time he ran the business.I was going to say it was the only thing he has done worse than commentary but then I had a reality check and his commentary is much worse.
Roland Dane is smart enough to run it but also smart enough not to pay any more than what it’s worth so might miss out,