Jake Silverstein: Welcome Addition or Another American Horror Story?

Swansea City sprung a huge surprise this week with an official club statement announcing the arrival of Jake Silverstein to the Board of Directors. It’s dressed up as “investment” again but is the arrival of Jake Silverstein just what we need or another American nail in the club’s coffin? 

Jake Silverstein and the ATFV Ediitor

On the surface this appears to be significant good news for the Swans with a cash injection not only from Jake Silverstein but also from Kaplan & Levien as they match the new man dollar for dollar.

With defeat in the Play-Off Semi-Final to Brentford condemning the club to another season in the Championship, with a vastly reduced parachute payment, then money is going to be tight. 

Throw in the continuing effects of Covid-19 and money is going to be tighter than a nun’s knickers superglued in place by the Mother Superior.

Make no mistake, there are only a handful of football clubs across the four divisions that have the slightest hint of immunity to the effects of the Coronavirus; whilst the likes of Manchester United can haggle over a £100m deal for Jadon Sancho and their City rivals can splash out £40m on mediocre defender Nathan Ake, clubs in Leagues 1 and 2 are voting to implement wage caps in order to survive. 

The Swans face the twin threats of reduced parachute payments petering out and an absence of much needed gate receipts with little real prospect of paying fans in the stands this side of Christmas at least.

For more on the financial effects of Covid-19 check out Andy Godden’s ATFV article HERE

In the cold hard light of the immediate challenges ahead then the dollars that Jake Silverstein is bringing to the table are most welcome…

…BUT…

As ever with this disastrous ownership of Swansea City all that glitters is not gold.

First off the money Jake Silverstein is laying down is in the form of loans, as is the money Kaplan & Levien are said to be putting in to match Silverstein.

Now there’s no indication at all how much money we are talking about here but I’ve always been uncomfortable, from the pre-takeover days, with the thought of our club being in debt to a bunch of hedgefunders. 

The suggestion is that these loans will be converted into equity in the future, meaning that we would no longer be in debt to these men but they will have an even tighter grip on the club as they know the Supporters Trust has absolutely no chance of matching these loan amounts.

So we are staring at two rather unpalatable scenarios:

1/ The club owes significant sums of money to a bunch of capitalist chancers on who knows what repayment terms and on what sort of interest rate or;

2/ The nightmare scenario that many have warned about all along, the dilution of the Trust out of existence therefore completing the robbery of a £20m stake off the FANS, will come to pass

Are either of those two scenarios worth the short term benefit of a cash injection? I’ll leave you decide for yourselves but I bet you can guess what I think!

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In predictable fashion the usual suspects in the Press fell over themselves to report on the “investment” without questioning too much the spin pumped out by the Americans, and without including the perspective of the Supporters Trust. To be fair to Chris Wathan he did report that this was an initial loan transaction but then I guess he’d know that significant little nugget would be revealed by the Trust when they were forced to release their own statement to clarify the situation.

That Trust statement makes pretty depressing but predictable reading as it reveals the total contempt the American ownership applies in all of its dealings with the body that not only holds 20% of the club but actively represents the fans. You know, the fans – those people Kaplan, Levien and now Jake Silverstein purport to love and admire so much.

This particular paragraph in the Trust’s statement lays bare the continuing contempt the majority owners have for their fellow shareholder and fans’ representative:

The Trust would like to put on record that we were not consulted on yesterday’s public statement and we had not been informed by the majority owners that any agreement had been reached. Our most recent information was that discussions were still being continued. It is disappointing that it seems an agreement has been finalised without any discussion with our representatives.

There’s certainly one thing the Press hasn’t picked up that’s puzzling me about this whole announcement, and it is this: if the money pumped in is a loan right now and not yet equity in the club, then how the Hell has Jake Silverstein become a Board member?

Let’s remember that when they took over, Kaplan & Levien made it a condition that shareholders had to own a 5% stake in order to sit on the Board – this was used to ruthlessly dispose of long serving directors Steve Penny and Don Keefe, let’s not forget.

So having simply loaned money to the club at this point how has Silverstein been elevated to the Board without that 5% stake? Of course it’s not the first time that Kaplan & Levien have played fast and loose with their own rule. Remember the farce of trying to sneak Leigh Dineen back onto the Board without that 5% minimum stake and without consulting the other shareholders, instead “accidentally” submitting paperwork to Companies House?

Let’s bear in mind here that I’m anything but an expert in the murky world of business and finance but it is something that is sticking out like a sore thumb to me and I hope that either the Trust or some of our better Press (Ian Mitchelmore or Stuart James) address and explain this anomaly.

The other alarm bell that’s ringing loud and clear for me is the assertion that Silverstein is going to become “actively involved in the running of the club”. 

The only silver lining of our relegation was the fact that it led Kaplan & Levien to disappear into the American sunset, leaving the extremely capable Trevor Birch to run the club without interference. I know Birch is not everyone’s cup of tea and is labelled a “puppet’ by some, but I believe the club would be in a far worse situation without his expertise and handling of our financial situation.

In my mind the last thing we need is for the Americans to suddenly start interfering again…we all know how that’s turned out in the past <cough> BOB BRADLEY <cough>

I certainly don’t want to write Jake Silverstein off immediately, and I sincerely hope he will be just what we need…but given the sketchy detail that’s come out so far and the way Kaplan & Levien have handled things again, I fear that this may well be another American nail in our club’s coffin. A little bit of detail and transparency would go a long way towards proving me wrong.