thoughts on any possible stadium deal (1 Viewer)

[James Smith]

I assume you know what happened at Doncaster regarding the ground and the management company do you?

Only remember what I was told at Bell Vue when watching a match there. That there was an arson attempt by some bloke called Richardson (no relation to ours) who I think was chairman*. He went to jail for that and Mr Ryan and co moved in to own/run the club, they evidently built a new stadium because the old one wasn't great, steeped in history but I personally didn't like being that cramped in my seat. Haven't been to keepmoat yet.

Is there more?

*which is why it stuck in my mind.

 

---

[CJparker]

Only remember what I was told at Bell Vue when watching a match there. That there was an arson attempt by some bloke called Richardson (no relation to ours) who I think was chairman*. He went to jail for that and Mr Ryan and co moved in to own/run the club, they evidently built a new stadium because the old one wasn't great, steeped in history but I personally didn't like being that cramped in my seat. Haven't been to keepmoat yet.

Is there more?

*which is why it stuck in my mind.

Yes, there's more. I think Donny Council built the Keepmoat for the club and then charged them a peppercorn rent to play there. If true, a scandalous mis-use of public money. Grendel thinks that this, and other "you scratch my back etc" deals from local councils to their mates in football clubs obliges Cov council to provide a ground for free. Rather, they have been fiscally responsible in charging the going rate for facilities they paid to complete - in Grendel land this equates to "bleeding the club dry". Listen to him and he'll try to claim that ACL, not SISU, are the authors of our current predicament.

 

[Grendel]

Yes, there's more. I think Donny Council built the Keepmoat for the club and then charged them a peppercorn rent to play there. If true, a scandalous mis-use of public money. Grendel thinks that this, and other "you scratch my back etc" deals from local councils to their mates in football clubs obliges Cov council to provide a ground for free. Rather, they have been fiscally responsible in charging the going rate for facilities they paid to complete - in Grendel land this equates to "bleeding the club dry". Listen to him and he'll try to claim that ACL, not SISU, are the authors of our current predicament.

They wanted to charge them £300,000 a year. Doncaster F C said get stuffed. Then the said we will pay that if you give us the management company and 100% revenues for everything.

The community caring council obliged.

 

[CJparker]

They wanted to charge them £300,000 a year. Doncaster F C said get stuffed. Then the said we will pay that if you give us the management company and 100% revenues for everything.

The community caring council obliged.

Strap yourself in Grendel as I am about to agree with you - to a point*.

If there was a law requiring councils to provide football clubs in their geographical jurisdiction with sub-commercial terms for stadium development / tenancy, I would be on the ant-ACL barricades with you. (would be nice for you to have someone to talk to )

However, unless I missed some obscure piece of Labour legislation, councils are entitled to charge private football clubs the going rental rate for facilities build for the club's use and paid for substantially by the council. It would be an abuse of public money to be "caring" - for that, read providing illegitimate subsidy to a private company.

As a taxpayer, I do not want the council giving favourable terms to any business, including my football club - especially when it clearly cannnot be afforded at a time when public services are being cut back. What about all the Villa fans living in the city, or non-football fans in general - why should they pay to the upkeep of CCFC?

You argue that I want to do the club down - not so, I want it to stand on it's own two feet, and not rely on state subsidy which has shown to be a limiting factor in business development in all kinds of industries. Had SISU not cocked things up on the playing side, we would be in the PL now and the rent would be a drop in the ocean in terms of our income.

ACL even offered CCFC a variable rent in 2004-05, which the club rejected on the basis of an assumption we'd be promoted, not relegated, and so the variable option didn't suit them. It's therefore a bit late in the day now to complain about the rent being unaffordable - if it is, it's not ACL's fault at all.

* As I said - up to a point

 

[Spencer]

Yes, there's more. I think Donny Council built the Keepmoat for the club and then charged them a peppercorn rent to play there. If true, a scandalous mis-use of public money. Grendel thinks that this, and other "you scratch my back etc" deals from local councils to their mates in football clubs obliges Cov council to provide a ground for free. Rather, they have been fiscally responsible in charging the going rate for facilities they paid to complete - in Grendel land this equates to "bleeding the club dry". Listen to him and he'll try to claim that ACL, not SISU, are the authors of our current predicament.

But they haven't been charging the going rate - far from it.

 

[CJparker]

But they haven't been charging the going rate - far from it.

Au contrere - the council invested around £30m in the stadium project, as unanticipated investment (partly covered by a new mortgage).

Why don't you go to the private sector, ask for £30m in funding from investors and tell them you are willing to pay them back £100k per year, or £400k per year - you'd get laughed out of the door mate. Or thrown out.

 

[James Smith]

They wanted to charge them £300,000 a year. Doncaster F C said get stuffed. Then the said we will pay that if you give us the management company and 100% revenues for everything.<br />
<br />
The community caring council obliged.

<br />
<br />
I've now looked this up in a bit more detail and there is a very big difference between Doncaster Rovers and ourselves. You're right about at least one thing however there is a figure of £300,000 that comes into play. So the Keepmoat stadium was built as a community stadium and there was as there is in Coventry, a management company looking after the stadium. So their company called "Stadium Management Company" was losing approximately £300k a year compared to ACL which is financially in reasonably good shape and would be generating profits if all the surplus wasn't reinvested in the stadium. Just to be clear that would have shown up on the council accounts as a £0.3m loss. So Doncaster Rovers offered to run the stadium and take over the increased lease (now 99 years) for £100k per year.

The major difference between them and us is that ACL isn't showing up on the council books as a loss. Yes the council took over the mortgage but I suspect at financially better rates than the money would have got sitting in the bank. So each month and PWKH please feel free to step in and correct me, ACL makes the mortgage payment to the council not the Yorkshire Bank. This is I think for much less interest than the YB were charging but the council still get more return on their money than they would have done had it been sitting in the bank. As a result of all this ACL were able to drop the annual rent for our club to only £485k.

So when you say

The community caring council obliged

you are being more than a bit economical with the truth. The council were staring at financial hole of nearly a third of a million in their books each year and I can't see the non football supporting council tax payers being too happy about that. So you can imagine that they were keen to remove this drain on council finances and as a result offloading a long lease made sense.

So lets look at the numbers:

Scenario A - The council keep the lease/freehold.

A 99 year lease costing £300,000 the council per year amounts to £29,700,000 or a nearly £30 million total loss.

Scenario B - The council sell the lease/freehold.

A 99 year lease generating £100,000 for the council per year amounts to £9,900,000 or a nearly £10 million total profit.

I realise that these are very simplistic calculations and things like depreciation and inflation etc. will come into play but it illustrates the point.

Which scenario would you pick if you were a councillor in Doncaster then Grendel?

 

[stupot07]

Au contrere - the council invested around £30m in the stadium project, as unanticipated investment (partly covered by a new mortgage).

Why don't you go to the private sector, ask for £30m in funding from investors and tell them you are willing to pay them back £100k per year, or £400k per year - you'd get laughed out of the door mate. Or thrown out.

I'm pretty sure the council only put £10m in.

 

[CJparker]

The point is that we shouldn't be relying on a "caring" council - councils have no obligation to support football clubs, and we need to be viable as a business, regardless of what cushy deals are given to other clubs. Once you realise this, and that ACL did offer a variable rent in 2005 which CCFC cynically turned down as not in it's expected interest at the time, and when you remember that it's SISU that got us relegated to league one, you can quickly see t hat it's SISU, not ACL, who are 100% to blame.

I'd like someone to pick the bones out of that and then come back with a well-argued, logical counter argument - but it won't happen. I have challenged people on here many times, but they can't because no such counter argument really exists. Instead, they just hide behind name calling and try to make my argument illigitimate by claiming I want to see the club destroyed.

While I can see that there is a minor public interest in having a pro football club in the city, the fate of a few mancy pubs staying in business doesn't really warrant the level of subsidy that many on here are demanding as a CCFC entitlement.

 

[Jack Griffin]

I'm pretty sure the council only put £10m in.

The council voted on a £21M loan to complete the project, that ACL are paying back. So they put in £31M in all, £21M of which is being paid back.

http://news.bbc.co.uk/1/hi/england/coventry_warwickshire/3198884.stm

How many times do I have to post this?

 

[CJparker]

The council voted on a £21M loan to complete the project, that ACL are paying back. So they put in £31M in all, £21M of which is being paid back.

http://news.bbc.co.uk/1/hi/england/coventry_warwickshire/3198884.stm

How many times do I have to post this?

Beat me to it Jack!!!

So, can someone PLEASE tell me where I can get a £100k p/a or less, payback on a financier's investment of £31m - I will get down there first thing on Tuesday.

Of course, on the off-chance that such an ROI is commercially unviable in the private sector, you might argue that an elected local authority has a statutory duty to match those terms available in the private sector, if it is not to be giving subsidy to a private business. Or, this fundamental point, which undermines all anti-ACL arguments, might be conveniently ignored.

 

[oldskyblue58]

just to answer a few of the replies

50% of the ownership of ACL does not give the club 50% of the income in the current set up

Think I need to clarify that I do not think that SISU would get a chance of anything I suggested, so it is far from suggesting things from SISU's side of things

I think the stakeholders in ACL are willing to offer the operational income streams from events, conferences and matchdays to a new owner. However I do not think (certainly seemingly backed by Cllr Matons comments) that the stakeholders are looking to immediately hand over the whole site to a new owner. What the experience has done is to highlight to Council & Charity that you cannot take things at face value and that there has to be proven trust with shared objectives. Someone may of course come in and make an offer they can not refuse, just do not think that will happen for a stadium whose key tenant is a L1 financially crippled football team unlikely to guarantee significant income.

The deal with Compass was indicated as worth £125m ...... that was the anticipated turnover for the site in 2009 for next 10 years..... it will of course be assessed differently at the moment.

The Charity entered negotiations with SISU last year in good faith. They believe that long term the club needs access fully to the income streams of the site.... SISU own the club ..... they were bound to at least investigate the possibility, Heads of agreement were apparently agreed but it went no further, possibly because it was just a fact find for SISU. The Charity never intended to stay long term, and if it believes a deal could be good for it and the club it will attempt that deal. However there has been so much bad blood that no one Charity or CCC will rush into a deal with the first person to come along - it has to have comitment, trust, substance & performance of promises

Not sure there is a simple solution..... the whole set up has been "confused" by both sides (club & ACL). SISU have no place to go with this imo- CCC simply wont entertain doing business with them for starters, and I would guess the Charity doesnt feel a whole lot different. To simply cut out ACL will require all sorts of different agreements including CCC, Charity, IEC, Compass, PWLC to name some . I dont doubt it can be done but is there a will on the ACL stakeholders to actually do it right now ? I might well be wrong but the point I was making is there are all sorts of options as to how this can be done and structured that give CCFC control of some all or none. Yes that might be one lease but somehow you have to think that things like IEC were set up for a reason and provide other options that might facilitate a different deal that may be less costly and more flexible to a potential investor.

The council received £21m from ACL in 2004 and ACL did that by borrowing from Yorkshire bank. The council took on the remaining bank loan in 2013 by putting 14.4m in to ACL from a central Govt loan body which is being repaid by ACL to CCC to PWLC. ACL paid off Yorkshire bank but owe CCC £14.4m

I do not think the Charity or CCC expect a new club owner to come in and immediately commit to site development.... they are looking for a longer term commitment to do so. That gives everyone a little more time. I sometimes think people get wrapped up in the moment whereas there is no immediate panic. What ACL want right now is financial stability particularly at CCFC

Does the building of a new ground make sense to me - no

Like i said in the title ..... just thoughts ....... all of which are to demonstrate there is flexibility of options ...... in normal business there would seem to be a single option but this is not a normal business situation and the attitudes/egos/loyalties/ objectives of the parties come into play. Keep an open mind, things have not been as expected so far why expect that to change.

 

[stupot07]

just to answer a few of the replies

50% of the ownership of ACL does not give the club 50% of the income in the current set up

Think I need to clarify that I do not think that SISU would get a chance of anything I suggested, so it is far from suggesting things from SISU's side of things

I think the stakeholders in ACL are willing to offer the operational income streams from events, conferences and matchdays to a new owner. However I do not think (certainly seemingly backed by Cllr Matons comments) that the stakeholders are looking to immediately hand over the whole site to a new owner. What the experience has done is to highlight to Council & Charity that you cannot take things at face value and that there has to be proven trust with shared objectives. Someone may of course come in and make an offer they can not refuse, just do not think that will happen for a stadium whose key tenant is a L1 financially crippled football team unlikely to guarantee significant income.

The deal with Compass was indicated as worth £125m ...... that was the anticipated turnover for the site in 2009..... it will of course be assessed differently at the moment.

The Charity entered negotiations with SISU last year in good faith. They believe that long term the club needs access fully to the income streams of the site.... SISU own the club ..... they were bound to at least investigate the possibility, Heads of agreement were apparently agreed but it went no further, possibly because it was just a fact find for SISU. The Charity never intended to stay long term, and if it believes a deal could be good for it and the club it will attempt that deal. However there has been so much bad blood that no one Charity or CCC will rush into a deal with the first person to come along - it has to have comitment, trust, substance & performance of promises

Not sure there is a simple solution..... the whole set up has been "confused" by both sides (club & ACL). SISU have no place to go with this - CCC simply wont entertain doing business with them for starters, and I would guess the Charity doesnt feel a whole lot different. To simply cut out ACL will require all sorts of different agreements including CCC, Charity, IEC, Compass, PWLC to name some . I dont doubt it can be done but is there a will on the ACL stakeholders to actually do it right now ? I might well be wrong but the point I was making is there are all sorts of options as to how this can be done and structured that give CCFC control of some all or none. Yes that might be one lease but somehow you have to think that things like IEC were set up for a reason and provide other options that might facilitate a different deal that may be less costly and more flexible to a potential investor.

The council received £21m from ACL in 2004 and ACL did that by borrowing from Yorkshire bank. The council took on the bank loan in 2008 by putting 14.4m in to ACL from a central Govt loan body which is being repaid by ACL to CCC to PWLC. ACL paid off Yorkshire bank but owe CCC £14.4m

Like i said in the title ..... just thoughts ....... all of which are to demonstrate there is flexibility of options ...... in normal business there would seem to be a single option but this is not a normal business situation and the attitudes/egos/loyalties/ objectives of the parties come into play. Keep an open mind, things have not been as expected so far why expect that to change.

Yep that was my understanding - the council put in £10m, ACL put in the £21m (yorkshire bank loan) not the council. The council then subsequently took a local government loan (?) for £14m to loan to ACL (ie they didn't use their own money) which paid off what was owed on the original £21m loan. ACL will pay back that £14m.

Therefore the council have only ever put in £10m.

 

[stupot07]

The council voted on a £21M loan to complete the project, that ACL are paying back. So they put in £31M in all, £21M of which is being paid back.

http://news.bbc.co.uk/1/hi/england/coventry_warwickshire/3198884.stm

How many times do I have to post this?

But their investment was only ever £10m and the original £21m came from the Yorkshire bank.

 

[stupot07]

Beat me to it Jack!!!

So, can someone PLEASE tell me where I can get a £100k p/a or less, payback on a financier's investment of £31m - I will get down there first thing on Tuesday.

Of course, on the off-chance that such an ROI is commercially unviable in the private sector, you might argue that an elected local authority has a statutory duty to match those terms available in the private sector, if it is not to be giving subsidy to a private business. Or, this fundamental point, which undermines all anti-ACL arguments, might be conveniently ignored.

They didn't invest £31m. £21m was paid by ACL via Yorkshire bank loan.

 

[CJparker]

They didn't invest £31m. £21m was paid by ACL via Yorkshire bank loan.

Stu, whatever way you dress it up, CCFC had £31m of funding from CCC/ACL (via direct funding and bank loan) - that's the point we're making. That is money that went into the stadium, and on which the rent is going to pay back ACL and its shareholders.

 

[cloughie]

Au contrere - the council invested around £30m in the stadium project, as unanticipated investment (partly covered by a new mortgage).

Why don't you go to the private sector, ask for £30m in funding from investors and tell them you are willing to pay them back £100k per year, or £400k per year - you'd get laughed out of the door mate. Or thrown out.

Or sent to the cauladon centre

 

[stupot07]

Stu, whatever way you dress it up, CCFC had £31m of funding from CCC/ACL (via direct funding and bank loan) - that's the point we're making. That is money that went into the stadium, and on which the rent is going to pay back ACL and its shareholders.

But they haven't CJ - who owns the Ricoh? Non of that £31m has gone to the football club.

 

[georgehudson]

let's hope the administrator can unravel the mysteries of all of this money,
JS has probably got a version, will it come to fruition though?

 

[cloughie]

Stu, whatever way you dress it up, CCFC had £31m of funding from CCC/ACL (via direct funding and bank loan) - that's the point we're making. That is money that went into the stadium, and on which the rent is going to pay back ACL and its shareholders.

Well Grendel obviuosly thinks the funding came off the money tree at the bottom of the garden so the council have been raking it in

OR were they paying off the funding for the build

As CJP said which ever way you dress it up the funding of the stadium build has to be paid for, . About 350,000 people are rate payers only about 3% of those people go to games, so why should all ratepayers pay for the football club to have a stadium?

 

[oldskyblue58]

Is it not the case that CCC/ACL have found 31m to help fund building a stadium from which CCFC have benefited by playing at that stadium (tempered by your view on the rent paid so far).......... so does that make you both right CJ and Stupot ?

 

[James Smith]

<br />
<br />
I've now looked this up in a bit more detail and there is a very big difference between Doncaster Rovers and ourselves. You're right about at least one thing however there is a figure of £300,000 that comes into play. So the Keepmoat stadium was built as a community stadium and there was as there is in Coventry, a management company looking after the stadium. So their company called "Stadium Management Company" was losing approximately £300k a year compared to ACL which is financially in reasonably good shape and would be generating profits if all the surplus wasn't reinvested in the stadium. Just to be clear that would have shown up on the council accounts as a £0.3m loss. So Doncaster Rovers offered to run the stadium and take over the increased lease (now 99 years) for £100k per year.

The major difference between them and us is that ACL isn't showing up on the council books as a loss. Yes the council took over the mortgage but I suspect at financially better rates than the money would have got sitting in the bank. So each month and PWKH please feel free to step in and correct me, ACL makes the mortgage payment to the council not the Yorkshire Bank. This is I think for much less interest than the YB were charging but the council still get more return on their money than they would have done had it been sitting in the bank. As a result of all this ACL were able to drop the annual rent for our club to only £485k.

So when you say you are being more than a bit economical with the truth. The council were staring at financial hole of nearly a third of a million in their books each year and I can't see the non football supporting council tax payers being too happy about that. So you can imagine that they were keen to remove this drain on council finances and as a result offloading a long lease made sense.

So lets look at the numbers:

Scenario A - The council keep the lease/freehold.

A 99 year lease costing £300,000 the council per year amounts to £29,700,000 or a nearly £30 million total loss.

Scenario B - The council sell the lease/freehold.

A 99 year lease generating £100,000 for the council per year amounts to £9,900,000 or a nearly £10 million total profit.

I realise that these are very simplistic calculations and things like depreciation and inflation etc. will come into play but it illustrates the point.

Which scenario would you pick if you were a councillor in Doncaster then Grendel?

Seriously Grendel which one would you pick A or B?

 

[CJparker]

Is it not the case that CCC/ACL have found 31m to help fund building a stadium from which CCFC have benefited by playing at that stadium (tempered by your view on the rent paid so far).......... so does that make you both right CJ and Stupot ?

Stupot is wrong, in that he is arguing that the multiple sources of funding and mechanisms do not amount to the club having to provide a return on the £31m invested - wrong, they do. The club has had the ground built for it, and in the private sector would be offered terms of not much less than £1m p/a to do so.

As Cloughie and OSB say, the council have no obligation to provide sub-commercial terms, which is what some on here are asking when they demand a "Doncaster-style" agreement of £10k p/a. That amount wouldn't even cover the interest payments on the unpaid £1.3m p/a, so these people are effectively asking for a ground for free.

We should grab the £400k offer with both hands and thank our lucky stars - council/ACL have bent over backwards to keep us at the Ricoh, sacrificing their own interest to do so. The only movement from SISU's starting position seems to be asking for more concessions rather than meeting in the middle. Can't blame the council for losing patience and saying "take it or leave it" - that's the only way to deal with the likes of SISU

 

[stupot07]

Stupot is wrong, in that he is arguing that the multiple sources of funding and mechanisms do not amount to the club having to provide a return on the £31m invested - wrong, they do. The club has had the ground built for it,

That's where you are wrong, because I stated nothing of the sort. By keep stating the council put in £31m it insinuates to those that don't know the detail that £31m of tax payers money was used. It wasn't and that is the reason I pulled you up on.

And actually we have paid £9.1m rent plus the contents of the escrow account back, so they have had nearly a third of their investment paid back in the 8 years since we moved in.

 

[CJparker]

That's where you are wrong, because I stated nothing of the sort. By keep stating the council put in £31m it insinuates to those that don't know the detail that £31m of tax payers money was used. It wasn't and that is the reason I pulled you up on.

And actually we have paid £9.1m rent plus the contents of the escrow account back, so they have had nearly a third of their investment paid back in the 8 years since we moved in.

OK I stand corrected on the issue of "who" put in the £31m - but don't let the cloud the issue that £31m has been put into the stadium, and as CCFC being chief beneficiary ACL, on behalf of itself and shareholders and creditors, is entitled to charge us the rent at the level you have described, which is commercially viable for them as an independent financier, as you rightly point out.

The broader point is that CCFC fans really need to stop blaming external sources, like ACL and the council - our problems are 100% home grown and we can only start to change things if we firstly stop blaming others and then look at what we can do ourselves to improve. Step 1 - throw out SISU. Step 2 - recognise that any means necessary, short of winding the club up, may be required to get SISU out ASAP, and this should be pursued despite the risks.

 

[skybluesam66]

£31m put in by acl council- fact
£30m put in by ccfc through rent and decontamination - fact
£60m received from tesco sourced by ccfc - fact

Ownership/lease
Acl/council 100% ccfc 0%

 

[Jack Griffin]

£31m put in by acl council- fact
£30m put in by ccfc through rent and decontamination - fact
£60m received from tesco sourced by ccfc - fact

Ownership/lease
Acl/council 100% ccfc 0%

The club never put in £20M decontamination - fact.
The club never put much money into the project that they were not paid back for in some way.

http://www.thefreelibrary.com/Site+...NTAMINATION+WORK+COMPLETE,+NOW...-a0100547390

THE first phase in the construction of Coventry's new pounds 60 million, multi-purpose arena is finished.

Environmental specialists have been working to decontaminate pockets of land on the former Foleshill Gasworks site since February in preparation for building to start.

Contractor Edmund Nuttall Ltd has been carrying out the work under the guidance of environmental consultants QDS.

Working with the Environment Agency, the specialists have dug out material from up to four metres down. The matter removed is the normal by-product and residual waste from the gasworks, which opened in the 1820s.

The clean-up operation was funded by supermarket giant Tesco as part of the deal to build a massive store next to the arena site.

AWM & ERDF funding £4.8M & £4.4M respectively - fact.
£8M interest from monies from Tesco - fact.