JOHN Davison – the driving force behind the Altium bid to re-shape snooker back in 2002 – has entered a proposal for consideration by the membership (players) of the World Professional Billiards and Snooker Association ahead of their EGM next Wednesday.
Davison’s vision is laid out in the letter below which has now been circulated amongst the players.
110sport will, as always, bring you the reaction from the players to this proposal.
In 2002, Davison failed to sway the players towards his plans for the future development of the game. Rejection of his ofer meant the status quo prevailed, and the then Board of World Snooker survived, handing the commercial rights to World Snooker Enterprises whose involvement in the game last less than a year.
Since then snooker has survived rather than prosper.
Below is John Davison’s detailed proposal as set out in his letter.
I welcome the chance to become the commercial partner to the WPBSA members, working with them to bring stability to the game and from that foundation, to build an exciting growing future for all of its stakeholders.
I note the points you have raised with regard to the bid process and, in particular, the importance being placed on transparency and impartiality. I would be grateful if you could please confirm that:
1. My proposal will be passed on (in full) to every individual member of the board;
2. I have now been (and will continue to be) given access to all information that has been provided or made available to any other bidder; and
3. I have now been (and will continue to be) given copies all communications made by other bidders to the Board and/or the membership in connection with any competing bid.
My understanding, based on our discussions, is that a general meeting has been called for Wednesday 2nd June 2010. Please provide me with copies of all resolutions and other documentation pertaining to any other bids that will be considered at that meeting.
In view of the tight timings involved, I would ask that the board consider the proposals outlined in this letter and respond in good faith to me before 6pm (London time) on Wednesday 26th May 2010. If I do not receive a satisfactory response before then I will obviously need to consider my options.
In summary, my offer is as follows:
Guaranteed at £5.0m in 2010/11, £5.2m in 2011/12 and £5.4m in 2012/13. That is £15.6m in prize money in the next three years and minimum guaranteed growth thereafter of 5% per year. In 2010/11the guaranteed prize money for top 64, top 48, top 32 and top 16 players is £9,400, £19,800, £34,600 and £73,000 respectively.
The 2010 season will comprise of 10 ranking events, 2 invitational events and the 6 PTC events. The 2011 season will include one additional new ranking event.
The ranking system will be agreed between WPBSA, players and players representative bodies such as the SPA.
All players in the top 64 will receive full insurance for themselves and their families to cover medical costs when they are in the UK or abroad. They will also receive travel insurance as well as additional personal insurance to cover loss of income in cases where they are injured, ill, have had a family bereavement or missed an event due to a cancelled flight.
I would expect to secure the commercial rights to snooker for an initial 15 year period, at the end of which the WPBSA will be free to re-tender the rights to any commercial partner, although by that point I hope that I will have clearly demonstrated the value of reselecting me for a further period.
I will acquire 63% of WSL from the WPBSA for £315,000, valuing WSL at £500,000. That purchase price will be paid to the top 64 players as a special dividend in cash immediately the acquisition is completed.
The remaining 37% of WSL shares will be held in a Players’ Trust administered by the WPBSA. This will be treated as the players’ equity participation in a joint investment. I expect my investment to generate a dividend income for me in the future, and for the players to receive exactly the same dividend per share that I do. Each of the top 64 players will receive an equal share of the dividends paid out for the 37% of shares held by the Players Trust. When there are dividends available to be paid to shareholders, dividend cheques will be given to the eligible players at the season end awards ceremony which we will reinstitute in the calendar.
The association will receive a day 1 payment of £1,000,000 from WSL to provide it with a robust funding base and support a strong team of new Independent Directors. It will receive a further £250,000 every year, including in 2010, to enable it to promote the game at grassroots level, administer disciplinary procedures and the rules and regulations of the game.
There are cash reserves of c. £3,500,000 in WPBSA/WSL. Following my acquisition of WSL, the WPBSA will have £1,000,000. The remaining reserves of c. £2,500,000 will be left in WSL. Up to £1,500,000 of the reserves in WSL will be invested in the development of new ranking events. Any investment beyond this level will be funded by additional investment from the management team and WPBSA in proportion to their shareholdings. No dividends will be capable of being paid by WSL to its shareholders if it leaves less than £2,000,000 in cash in the WSL Balance Sheet.
The management team includes John Davison, Karl Bistany and Jolyon Armstrong whose backgrounds are as follows:
I (John Davison) am a highly successful professional investor and an Olympic athlete. I retired as a Partner in a Private Equity firm called Bridgepoint last year. If the board (or players) are interested to understand the kinds of companies in which Bridgepoint invests, go and take a look at its website which is www.bridgepoint.eu. Whilst at Bridgepoint I was involved in a wide range of investments, the most relevant and interesting being Dorna, the owner of MotoGP, where I was a Board Director. When I left Bridgepoint it had an investment fund of over £7 billion and was, as it still is, one of the most highly respected professional investment firms in the world. I know exactly what it is like to be a full time athlete having represented Great Britain in the 2000 Sydney Olympics in shooting and was elected by my fellow athletes to be the athlete representative on the BOA Athletes Commission. I now live 2 miles from where I went to my local state junior school, after which I went to my local state grammar school, then Cambridge University after which I also went to Harvard Business School. I have two young children, aged 5 and 7, and an Australian wife.
Karl Bistany is one of the most highly regarded sports rights agents in the world with over 20 years experience in the field of televised sport. Karl was the former President of Octagon CSI and represented the international media rights of major rights holders across the world including UEFA, the Premier League, the Football Association and the rugby Unions of Australia, England, New Zealand and South Africa (to name but a few). Since 2004, Karl has worked as an independent advisor to sports governing bodies, broadcasters and sponsors and his current clients include UEFA, Guinness, BT Vision, Real Madrid and the Bundesliga. Karl worked with me (John Davison) when Bridgepoint invested in MotoGP.
Jolyon Armstrong is one of the leading event and media experts in the UK with over 30 years experience at the top-level of international sports marketing, event management and communications. He has worked for some of the most famous broadcasters and brands in sports including the BBC, ITV, B Sky Sports, Braun, BMW, Heineken, Marlboro, NatWest, Stella Artois and Zurich. This has encompassed the Olympics, numerous World Cups, Formula 1, Ocean Racing, International Cricket, the Six Nations and Heineken Cup in Rugby, Stella Artois Tennis tournament and many other major events and championships. Jolyon is also a former international athlete in Basketball and was alongside me in my 2002 offer for World Snooker.
Between us we will bring to WSL a unique blend of high level business credibility and deep knowledge and experience in building long term commercial value in businesses and sports rights in particular.
We will use this to drive the development of new snooker events and increases in the value and duration of its broadcast and sponsorship contracts. We will work closely with the WSL team in Bristol, adding rather than removing staff where necessary, and with the WPBSA Board and its members, to deliver an exciting future for the game.
Why are Karl, Jolyon and I making this offer?
Well, since I last looked at snooker in 2002 it has moved backwards rather than forwards. Prize money has gone down, the number of ranking events has decreased, sponsorship and broadcast contract values have gone down. We believe that there is a great opportunity to bring long term stability to the sport of snooker and to use our business skills and experience to work with the WPBSA (and the players) to generate an investment return for ourselves along with increases in prize funds, events and dividends for the WPBSA and its members. After all, if the majority of other major sports can enjoy significant growth in revenues and media exposure why can’t snooker?
There are no additional commercial partners in our acquisition of WSL.
Please feel free to email or call me with any questions that you have about my offer or its deliverability.
This is all well and good but Barry Hear has actually proven he is doing things concretely. This are promises ... and it's all about top 64. No involvement of the amateurs. This involvement is essential for the development of the amateur game and ultimately the survival of snooker.
Also the EGM is next Wednesday. That's short notice for the players to really weight the pro and cons. Deliberate?
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