Hmm.
What I'm taking from this is a company that despite being gifted a stadium isn't yet turning a profit, with an obligation to pay over £2.3 million in interest on a £35 million loan which will also need to be paid back in 2022. I'm not saying that Wasps will fail anytime soon - but as headline news that doesn't look overly healthy to me.
Profit margins look pretty low, and they've been heavily discounting a key part of the product too (tickets), which also isn't a great mix from what I can recall of my limited financial knowledge. Evidence doesn't suggest that they're gaining much traction in terms of increased attendances, in fact I think it's the opposite for most games.
I take OSB's very legitimate point that the market still considers the bonds to be worth around the original value, but I do see some smoke and mirrors in terms of the security for them (a stadium that they don't own the freehold on, which loses a lot of value if Wasps aren't there, which they won't be if they're going bust and the bonds can't be repaid!).
I'm not challenging OSB's analysis here by the way - it's as honest and detailed as ever, but I don't quite see it the same way.
Regardless, they're still a franchise, they still don't have Coventry in their name or their heritage, and they're still in the way of the football club getting what they need. Personally, as a CCFC/CRFC fan I can see no reason to support them.
always good to discuss things with you duffer, so I certainly don't have any issue with you seeing things differently or anyone else
Just some additional thoughts and questions .....
Wasps are well less than two years in to a long term project. Is it reasonable to think that the group would be making profits at this stage given a number of one off costs and organisational changes. ?
What comes first success on the pitch or investing in the payroll/players ? Similar off the pitch too isn't it?
As I understand it part of the bond issue money has been retained to pay the first 3 interest payments - that alleviates the cash flow pressure to begin with
despite being in a non profit situation they still invested over 4m in infra structure and committed to improving their squad - people like Cipriani will not come cheap.
As said before depends how they intend to repay the loans as to whether its a problem. What they have done with the bond issue is to buy time to get the finances right, time to build success on the pitch. In the first two years after the bond issue then there is no cost cashflow wise either if they have retained monies to pay interest. What the bond issue does do is to spread the risk from one man to many - that's not bad thinking at all
Looking at the ticketing then the average price excluding VAT is around £15 per head (best CCFC have achieved is around £11 per head) If as some suggest 50% of the tickets are freebies that makes the average amount paid £30 ph by those actually buying (that's above the general ticket price I believe). those ticket theories don't seem to add up. Looking at ticketing then on like for like in 2015 ticket income of the group went up £400k compared to 2014 but on two less matches
Most of the incomes show significant increases but so do the costs certainly but I think what the accounts show is that it that the group have bottomed out the finances, are prepared to invest on and off the pitch. The guys running this are (a) very experienced financially (b) very experienced in running sports clubs or franchises, they understand from the get go the problems to be faced. They seem to understand the notion of invest to succeed and targeted investment
Have Wasps failed to engage the fans? Their average crowd may be down but it is (a) healthy (b) bigger than CCFC (c) bigger than they could even fit in to Adams Park. If they continue to succeed on the pitch, build their way in to the sporting community in Coventry and surrounding area then will crowds "drop" further? Certainly last season there was a curiosity element but .... Do they need to increase over last year or simply be better than they have been in years elsewhere?.
In terms of footfall then the Arena has over 1.5m. of that 300k will be CCFC and 200k Rugby in round terms. Things like footfall are important to things like naming rights. The Arena is unlike many other stadiums because of the other facilities there which all add value to the "name" too
As for the turnover mix then it would seem to be one third based on Rugby and 2/3rds based on the other elements of arena. Even the Rugby incomes seems to include 60% of it as central distributions That spreads the risk away from the team.
Events can take over 12 mths to get in to place. So for the first year at least some of the income/expenses were affected by decisions before Wasps got here or were able to control. As we know there is a definite drive to bring higher end entertainment to the Arena on a regular basis. But that is still to come
Difficult to see what the real margins are on the various income streams because there is no split on direct wages.
Thing is bringing in events tends to bring in other events because at least for a while it is seen as the place to be..... but that takes time. In terms of this project Wasps have been here next to no time and there is still plenty to build on
Don't think they will or have the intention of including Coventry in their name . Do they need to or do they just need to keep winning on the pitch?
Do CCFC add much to naming rights given they only have a two year commitment? To greatly improve naming rights they will need to commit for a much longer period and to actually succeed on the pitch (they haven't in years nor look likely to at the moment <fingers crossed that damn well changes>) then they can argue for a share on the premium on the naming rights above those available without them.
Having written all that, then it has depressed me about the future of our CCFC, and what has and is going on there, perhaps todays result will help dispel some of that. PUSB's
