The St Johnstone owners are preparing to dip into their own pockets to alleviate the cost of relegation and give Simo Valakari the best chance of bringing the Perth club straight back up, chairman Adam Webb has revealed.
As the first anniversary of the American takeover at McDiarmid Park looms, the expected ballpark loss of dropping out of the Premiership is around the £2 million mark.
Saints had £2.8 million in the bank when the last financial year accounts were published.
Webb has no intention of letting the club get too close to that security blanket being wiped out.
Having ploughed money into Cambridge United, when he was a minority shareholder there, the Atlanta-based lawyer has experience of putting his money where his mouth is.
And Webb’s fellow Saints in America investors are of a similar mind.
That “cash injection” could even happen before the year is out.
“The club has substantial reserves,” Webb explained.
“And, of course, we owe the Scottish Government as well (for a loan during the Covid-19 pandemic).
“If we get to a point where we’re getting down in cash, our ownership knows we’ll be having a fund-raise.
“There will be a buffer.
“I want to keep as much as we owe the Scottish Government but, frankly, that’s not going to happen because we’ll have to draw down that cash.
“Relegation causes a major deficit.
“So, the question is how much you keep on hand before doing a capital raise.
No timescale
“There’s no final decision on that yet.
“We have cash projections of where we think we’ll be.
“We are keeping a close eye on it and obviously they’ll have notice before we do a cash call or sale of shares, depending on what the mechanism is.
“It’s possible we’ll be there by late this year or early next year.
“Everyone has been informed of that and are comfortable with it.”
Webb added: “If we can avoid it, we will, but everyone has been told it might be needed.
“You never know what a cup run, a player sale or better ticket sales will do to the finances, there are things which can change the analysis.
“It’s not our preferred method, our goal is not to be doling out cash, it’s to be sustainable because that, historically speaking, works out better for everyone.”
‘Pay their share’
They all own up to 5% of the club.
“I have 70% of the ownership group so it’s mainly going to be on me,” said Webb.
“But it does help because the other guys will pay their share.
“They were all aware going in that it would be part of the ownership structure.
“At Cambridge United, I contributed money every year so I anticipated it could happen at St Johnstone.
“Now, we have a better budgeting profile, historically speaking, because the club has been run as a very tight ship.
“We are not going to give up on that sustainable model.
“Everyone who came in was prepared, they were warned it was a possibility.
“So, while I’m the majority shareholder, it will help share the load a bit.”
Strategic partner
With the financial safety net the American investors provide, Saints’ long-term security is assured.
But, if Webb identifies a tangible benefit to welcoming a new “strategic partner” on board, he would consider it.
It wouldn’t just be a case of seeking extra money for the sake of it.
“There are other people who occasionally contact us and who are potentially interested,” said Webb.
“There is a huge level of interest in UK football in the States, so I don’t feel it would be hard to get additional ownership if we wanted that.
“It’s one possibility as we look at a capital raise.
“But my belief is we’d only favour that solution if it was a strategic partner who is bringing something to the table.
“Multi-club groups are becoming a thing, like Atlanta United do with Aberdeen, for example.
“That is a great model.
“They can share resources and information – it’s a great idea.
“You also have data analytics companies who invest, as well as high-profile, wealthy or famous individuals who bring their own cache to the club.
“There are a lot of different strategic partners out there, so if we were going to open-up it would have to be people who wouldn’t just put in money but also bring something to the table which will help us grow the club.
“If someone brings connections, knowhow and knowledge – that’s what you’d want.”
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