Private inequity and nontent

Nothing-content, angry women and the pub-stack.

The world had moved on since then. The world had emptied.

- Stephen King, The Gunslinger

Photo by sophia valkova on Unsplash

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I’m really angry about the pub. Not sad-angry. Not cute-angry. Not quick-temper angry.

Rage-angry.

Slow-building, simmering, volcanic-caldera-when-the-gates-of-hellfire-open-and-weep-brimstone angry.

Everywhere I turn, I’m told: let go, relax, release your anger. Be at peace.

Accept your own futility.

And I get angrier.

It’s been awhile since I offered an update on the pub, hasn’t it?

That’s because I have no update to offer on the pub.

The pub is silent, the pub is still closed. It is coming up to a year of no pub.

What happens to an old building like this when it lies empty? It rots, slowly. Rainwater erodes slates and the kitchen roof folds in on itself. The building’s caretakers do nothing. Customers go elsewhere and forget it.

The world moves on.

I want to shout my rage to the world. I feel like I’m in a unique position to voice this particular rage. I happen to know (and loathe) how private equity works and I happen to live in a village where a private equity firm is strangling my much-loved pub.

Actually, that can’t be that unique.

This is the UK. Everyone works in or adjacent to financial services. Everyone has a pub that’s being fucked sideways into insolvency by private equity shareholding leeches.

And everyone has a newsletter too now, right? That’s the meal ticket. Everyone can have a Substack and be a writer! So can you. And you! Can’t sell your words? Sell community! Teach others how to Substack. Let’s all hold each other as we say nothing at all.

This isn’t unique. Surely it’s not just me getting waves of Insta-nausea on Notes these days?

“My subscriber count just hit bla-bla”.

Ask-me-anything videos.

(whisper it) Selfies…

I’ve written about the big business of selling community on Substack. I’ve written how annoying I find it when the same insider collective get plugged—by each other, by Substack, by noobs who expect that that’s what’s expected of them—regardless of the quality of their work.

The ones with the right connects? They write and get connected. Don’t worry, darling: Mummy is in publishing.

There seems to be a rash of Substack influencers with a background in women’s fashion and beauty. I don’t think that’s a coincidence.

Clearly there’s some cross-over in transferrable skills: ability to write click-bait-y headlines, sell people stuff they don’t need, write shiny fluff-words that evaporate instantly in the brain?

It’s nothing-content. Nontent.

Ponzi people peddle nontent to help others make nontent to help others make nontent. We can all stop creating and just consume in an infinite loop. No need to actually write anything unique or have a unique thought, just service the algo. Write less, smile more. Endless busywork, zero inspiration.

Except: DON’T.

This is the kind of gen-Ai shit we are about to (already are?) drowning in. You know why? Because it mimics us. You bet your ass gen-Ai can write the “grow your subscribers” bullshit better than you or I can. We don’t need more of it from real people who purport to be writers and creators.

Please. Stem the tide.

Say something real, about your life and your experiences. That’s what I want to read. Seriously. I’ll even pay you for it. I pay Lauren Hough and I pay Will Dowd and I pay Adam Nathan and I pay Suzanne Moore.¹ You know why? Because they make me feel real things when they describe their lived lives.

That is what will have value, in the gen-Ai onslaught.

That’s the only thing worth paying for here, ultimately.

So, why am I getting so angry about the pub?

Well, this is why.

Stonegate’s financial troubles are all over the papers.

Remember Stonegate? You know, the private equity-owned PubCo that has my village pub by the balls up for sale.

Their financial troubles may be summarised as this: Stonegate needs to raise more debt. Stonegate is struggling to raise more debt. Stonegate might go bust.

You know why I think that is?

Because Stonegate over-valued its assets. Banks like to see a valuation report when they lend. Stonegate’s purported values don’t match its actual values, I reckon, and that is why Stonegate is struggling.

Why do I suspect this? Let’s take an example.

My village pub has been valued by an independent expert at about £365,000. That is its value as a pub business, assessed by a chartered surveyor and pub market expert, based on possible footfall and a detailed analysis of menu offering and pricing.

You know how much Stonegate listed my pub for sale? £495,000. That’s £130k more than the independently-assessed market value.

Now, hang on, because this is where it gets fiendish.

That number reflects a purely notional value that Stonegate ascribed to this asset on its balance sheet. Who came up with that number? Who wrote the valuation report? Which firm of auditors signed off on it? And continue to sign off on it?

Who knows.

Stonegate is owned by private equity firm TDR Capital. Remember those shadowy bastards with nothing at all on their website apart from Antarctic cruises under the guise of environmental social governance? “Private equity” means they are private. They don’t have to tell us a damn thing.

So let’s think about this notional value of my village pub on Stonegate’s (private, obviously) balance sheet.

This secret number is very important to Stonegate. You know why? Because that is the number it can spin into equivalent debt through a nifty trick called net asset value (NAV) financing. That means borrowing against the value of underlying assets in your portfolio. Put simply: the higher the value of assets on your balance sheet, the more you can borrow.

But here’s the kicker: if you sell an asset for lower than the balance sheet value, you will record a balance sheet loss.

Uh oh.

Hence the inflated asking price of £495k.

The pub was never worth that much, could never be worth that much as a pub and no one ever has even come close to that much money—except Stonegate, when it seemingly made up a notional value and spun it into borrowed money.

That is not the number an independent expert valuing the pub business came up with. That number does not make sense for a pub business in our small village.

So where did it come from?

Please pay attention. This is the important bit.

That number only makes sense if you don’t want to run the pub as a pub.

It only makes sense if you are speculating on the pure value of the land; if you are speculating that the pub can be sold as juicy land, redeveloped for juicy residential, in a juicy Oxfordshire village—in a country drowning in a housing crisis².

Now, our pub is designated as an asset of community value and West Oxfordshire council would never approve a change of use.

But Stonegate doesn’t know that.

What Stonegate knows is that there are loads of pubs up and down the country that don’t have a mobilised network of community support and many less vigilant councils that wouldn’t blockade residential re-zoning.

A community group that doesn’t want to speculate on land value and just wants its pub to be a pub? Forget it. You must play ball with a value predicated not on actual pub business but on fake real estate potential. Most can’t afford to.

Pub loss up and down the country is rife. This is why.

This is, I believe, malpractice on a national scale—by a company that professes to be in the pub business—of buying up pub assets and mis-valuing them on the basis of hypothetical residential use.

How is this legal? How can these asset owners sit on empty pubs, at made-up prices too high to be bought as a pub, let the roof fall in and wait, like slow poison, for a residential re-zoning payday?

The proof is in the sale paperwork, if you don’t believe me.

Stonegate insist on a clawback clause. What’s that, you ask? Well, it allows the seller a speculative share of any profits if a purchaser ever managed to get the land redesignated and developed for residential use.

Do you see what I’m saying?

This—residential, not pub business—is their value-spinning plan. Years after selling our pub, Stonegate could still bag profits if a purchaser managed to build some houses there. Stonegate aren’t valuing their pubs. They are speculating on land value, re-zoned for residential.

Are you still there? This is really boring, isn’t it?

That is intentional.

It is intentionally boring because it’s so evil. The devil, as ever, is in the details.

They are counting on you to be bored. They are counting on you not to pay attention. They are counting on being able to cover up this great harm to traditional pubs and local communities up and down the country, in the footnotes of a wash of administrative nontent. Vendor agreements, asset valuations, clawback clause nontent—covering up the truth of my empty pub, its modest business prospects and its incalculable value to those who love it.

While it sits on their balance sheet, it represents notional value—even if that value is just a fucking notion—that can be leveraged and turned into debt. Even if the pub is closed, it is worth more to Stonegate as an empty number on a balance sheet.

Stonegate doesn’t care if the pub is closed. Stonegate’s valuation is of nothing; it is valuation of a nontent.

Everything that makes the pub valuable—the people that cluster around its wooden bar, the fire in the grate, the board games at the side for kids and the apple trees in the fucking garden—can’t be priced anyway.

Stonegate would rather carry on the charade of the pub’s pretend value of £495k on a balance sheet in the Caymans than accept a reasonable offer and some actual money.

And now you know why, right? A lower sale would be marked as a loss, even if it was never worth £495k in the first place. Stonegate would have to eat a loss that it engineered. It won’t do that, so instead it cleaves rigidly to an inflated price that in no way reflects reality.

Even if leveraging it into debt on the basis of a spurious valuation based on hypothetical residence, rather than actual pub, would be FUCKING FRAUD.

That’s my theory, anyway.

You’re still bored, huh? Maybe you’re even rolling eyes at me. Chillax, Karen, what are you getting so bent out of shape for?

Laurie Stone

wrote a Note recently about how, really, if we’re not getting angry—if we haven’t “exhausted ourselves with rage”—we are not writing what it is to be a woman in this world made for men.

I agree. I am angry way too often. I think of The Sopranos, Tony’s sister getting anger management therapy, the shame of “losing face”, letting your rage show.

We are told we should be zen and release our anger into the wind. Fail to do so and risk being labelled a Karen, mocked for your rage.

Hang on a second.

Who does it benefit, to stay quiet and well-behaved and un-Karen-like—except those who might be challenged?

There’s talk of going to sit in the beer garden when the weather turns nicer: a Kinder Scout of the pub. The gate is open and, even if it wasn’t, the stone wall at the back is knee high to a grasshopper. I vault it for apples in September.

I want to take back the pub. I want to nail this missive to the door. I want to pull a Luther at the Diet of Worms:

Here I stand. I cannot do otherwise.

I’m not religious but Luther was a real visionary, wasn’t he. He called out a bullshit system of papal indulgences and decoration of the spectacle for the illiterate masses.

He drew back the curtain and said: there’s nothing there.

Here I stand, drawing back the curtain on the nontent value-inflation of my pub and the value-inflation of writing nontent online.

Here I stand, biting the hand that feeds me.

If Substack’s value is based on people selling nontent about how to make nontent to other people to make more nontent, is it any different to the fake value of my empty pub?

Speaking of which, did you know that, apparently, Luther used to eat a teaspoon full of his own poop a day? Something to do with healthy gut bacteria. He was so ahead of his time.

Was it his thesis he nailed to the door, I wonder, or his faeces?³

Or is that (forgive me) a load of crap? Did the powers that be just want to smear him, shame him and make him unappealing, like an angry Karen?

You decide.

Being this full of rage really does feel like a mouthful of shit.

Is it just another spoonful of shit on the muck pile, I wonder— or a considered thesis?

We certainly can’t all be Luther.

Not even on Substack.

—

A final thought: Joel and I were in the back garden last week. We live in a cathedral of trees. Enormous horse chestnuts, the odd linden.

The cherry blossoms and green leaves strain the light, make a stained glass window.

Butterflies adorn the spectacle.

“They’re so improbable,” Joel said to me. “Butterflies.”

“What do you mean?”

“It’s amazing they’re alive. They’re like a living piece of paper that somehow has loads of energy stored up in it.”

He’s right.

What could be more powerful and have more energy than a piece of paper?

This word-paper of mine has loads of energy.

And I’ve got a lot stored up, for this fight, still.

—

TO BE CONTINUED.

1. I didn’t tag them because I’m not trying to get them to restack this piece. I don’t want anything for my money except the pleasure of reading their words.

2. Actually the crisis is not too few houses but too few owners. That’s a tale for a different time.

3. Can’t take credit for this one. Courtesy of the one and only Helen, and our rage-run convos about the pub.