SCG meeting questions (13 Viewers)
- Thread starter dongonzalos
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dongonzalos
Well-Known Member
I think it is tonight?
stupot07
Well-Known Member
ashbyjan
Well-Known Member
SCG was last night and to be honest nothing came out that we didn't already know. Both CRFC and CCFC stated that they were a bit caught out that the news of any talks had leaked out as they were at a very early discussion stage - and discussions is all it is. There is no fixed capacity on the initial phase but figures of 15-18k were bandied about with option to expand to 25k if needed in a similar way to MK had done. All admitted that site would be tight but not too tight to make it unviable. Transport was an issue but using examples like St Marys with park and ride schemes etc that too was seen as not insurmountable. Where the money for all this was coming from was brushed aside by Fisher with claims of substantial grants etc that a multi sports venture like this would attract and other capital into a separate property company. When pressed he just claimed it wasn't an issue and the important part was access to 100% of match day revenues - something that they couldn't get at Ricoh due to Wasps financial model simply not allowing it. Overall the mood from both parties was one of very cautious optimism but stressing that it was all very early stages in any process, it was a fact finding exploration of a possibility and that there were no concrete plans or contracts.
SkyBlueZack
Well-Known Member
More importantly, any news about the academy?
ashbyjan
Well-Known Member
Nothing positive about academy - obviously there is no room at BPA for one and a new ground. All that was said was they were still trying to get some sort of deal done with Coventry Sports Foundation but because they couldn't/wouldn't commit to anything long term it was proving difficult
SkyBlueZack
Well-Known Member
Thanks Jan. To me this is a far bigger issue than any new stadium or rental deal at the Ricoh. Without an academy to provide first team players and the occasional player to sell, the club will struggle to survive. Fingers crossed for a resolution. Is there anything us fans could do, do you think? Boycott? Petition? Write letters? After all it was built with us in mind. Would be a travesty to lose another purpose built facility.
stupot07
Well-Known Member
Thanks Jan.
Did they say anything else or give details about the Ricoh in terms of long term deal? Have they had discussions with wasps yet?
Do you think the BPA is a serious option or do you think they are bluffing? Obviously in the context of it being early stages?
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Did they say anything else or give details about the Ricoh in terms of long term deal? Have they had discussions with wasps yet?
Do you think the BPA is a serious option or do you think they are bluffing? Obviously in the context of it being early stages?
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ashbyjan
Well-Known Member
Fully agree Zack - without a top class academy the lifeblood of the club will be cut off, all the best youngsters will be taken by the other local clubs that have Cat 1 or 2 status academies. The Trust has in the past mobilized support for saving the academy and I am sure that it could do so again if needed. The Trust may have its differences with SISU and their actions but this is not about them but about our club and its future and as it is clear SISU are not prepared to do anything constructive so it may well fall to the fans to save it - whether that's through protests, fund raising, political pressure etc we will have to decide
ashbyjan
Well-Known Member
With respect to Wasps CA stated that they have had talks but due to the way Wasps business model is constructed it was very difficult for them to give the club what it needs. This he stated was not due to intransigence or vindictiveness from Wasps but simply a business reality - the Compass deal means that out of every £1.00 70p goes straight to the Compass joint venture company leaving 30p which is split 50/50 meaning that for every £1 spent by a City fan the club only gets 15p. This gave the club £72k last year - which to be brutal is £72k for no outlay or cost so it almosts covers our rent! He syas they are still trying to negotiate but it is very difficult - whilst we may like to believe we are a big fish if you look at the facts £100k rent, £400k food and beverage (before costs etc) bit of parking revenue - in the greater scheme of things (unpalatable as it may seem) it would appear that Wasps could survive without us so CA not in a great bargaining position. Is the BPA a bluff to put pressure on Wasps to do a deal? Is it a sop to fob off the Football League to show we are doing something about a permanent ground? At this moment in time I am personally prepared to give them the benefit of the doubt and say they are serious about it and if it makes financial sense, will fit on the site, logistical obstacles can be overcome then having a smaller city centre based ground would be great. However the biggest obstacle I forsee is that to make such a complex scheme really work it would need wholehearted council support and the relationship between the parties is not good to say the least and not sure if a simple leadership change is enough to alter this. For the time being I am happy to keep an open mind about it.
skybluetony176
Well-Known Member
Thanks for the update Jan. If they're talking about the MK model is that basically build a ground to a spec (for arguements sake) of 25K capacity but only fit it out to 15-18K capacity leaving blocks without seats, toilets and F&B facilities and therefore closed until a time when a hifger capacity is needed and then complete the fit out either in stages or one go?
skybluetony176
Well-Known Member
Thanks again Jan. Did anybody mention anything about the naming rights at the Ricoh? Could the club not do something along the lines of what West Ham are doing at the Olympic stadium? i.e. West ham raise the profile therefore making the sponsorship more attractive and then take a cut of the naming rights because of this? Not so disimular from us being at the Ricoh although obviously on a smaller scale.
Caught out the news had leaked out? It came directly from the CRFC website!
https://coventryrfc.me/2016/05/18/spring-evening-provides-winter-warmers/
EDIT: Sorry, forgot to say thanks Jan for the detailed update.
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oldskyblue58
CCFC Finance Director
So the set up with the F&B at the Ricoh is not unlike how the club have chosen to arrange the sale of merchandise and match programs (in a general sense). The club takes a straight split of the net profit and has none of the risks/liabilities surrounding staffing, supply, overhead. Can see the sense in "franchising" the operation but it does reduce the SCMP budget. All three situations were acceptable to the club when CCFC negotiated it. Strangely only one of the three is seen to be unacceptable now.
I would also guess that CCFC are trying to convince Wasps that they should be given a better split but (largely because they have none spare) not pay for it. Wasps are saying, I would guess, that it can be done but it costs to have greater access to those income streams
Situation with the Academy is a real concern. The news of no deal past 2017 and no site to go to will start to filter out. That will affect our ability to recruit youngsters now. This is something that needs to be sorted out as a matter of urgency. It takes priority over BPA in my view
torchomatic
Well-Known Member
Did you miss the bit where Wasps don't want to give us anymore income?
ashbyjan
Well-Known Member
Tony - naming rights were mentioned by CA as being a major source of revenue to clubs these days. He said something along the lines of Wasps/ACL not willing to give up any share of this important revenue stream for nothing. Why some feel they should simply hand us free money because we are CCFC is a bit myopic and unrealistic. As a third division football team that isn't committed to staying beyond 2 years do we really have much of a claim? Do we really raise the profile of the stadium that much? Maybe SISU by their constant court actions have got the name into the public domain more and maybe Joy deserves a share too (Damn it - I see a legal claim winging its way to ACL as we speak!!) There was no mention how a naming rights split would work at the BPA.
torchomatic
Well-Known Member
Not only that, Wasps have a bond to pay back and £2M a year in interest too, so they aren't likely to be handing over cash because they're being nice.
skybluetony176
Well-Known Member
No. Did you miss that they were talking specifically about F & B? I'm talking specifically about naming rights.
oldskyblue58
CCFC Finance Director
As I have said before I wouldn't get fixated on the fact that in 2022 the £34m loan needs to be repaid. They will have planned for that and it wont mean that Wasps Holdings needs to accumulate or find £34m by that time. It will either be a listing on the AIM or a second bond issue in my opinion.
* edit Current bond price after paying the half year interest this month is 105.3 that's a 5.3% premium on the original investment so it seems the market is reasonably happy so far
Before the acquisition the combined loan debt of both groups was 26m after the bond issue that debt was 40m but £4m of the loan had not been spent and was in the bank. So at 30/06/2015 loan debt had increased by £10m and most of that had been spent on enhancing the site and therefore value
Equally before the acquisition ACL & Wasps were paying out around £1m in 2014 and nearer 1.5m in 2015 interest. The bond carries 6.5% interest £2.2m Richardson seems at the moment happy to waive his interest rights. So the actual extra they have to find is 700k. Which so long as they get to be cash flow neutral or positive is doable
Every £ spent. Sorry but CA's statement is not true. But I am being pedantic I guess. Every £ spent goes to Wasps Holdings via their subsidiary IEC. Compass charge IEC for their services.
Finally an unhappy thought CCFC probably contribute less than £800k to the Wasps turnover that's less than 3% of the £26m+ they turnover as a combined group per year - take out the costs of supplying that turnover and that's the reason Wasps might like CCFC at the Ricoh but don't actually need CCFC at the Ricoh. Which is why they can play hard ball in any negotiations. A couple of larger events each year and they about cover it should CCFC leave.
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torchomatic
Well-Known Member
Thanks, OSB. That's they key really isn't it? We don't generate a great deal anyway, so there's no real incentive going forward to offer us a better deal or more money. If anything they'll want to charge us more.
torchomatic
Well-Known Member
Which they're unlikely to share with us. What is their incentive to?
oldskyblue58
CCFC Finance Director
That's the situation, with the help of others, that our owners & CCFC directors have put us in yes. The current rent is artificially low and CCFC put no real work/effort in to generating the F&B sales so yes I think it is going to cost us more if we are still there after 2018
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oldskyblue58
CCFC Finance Director
The only incentive they want is in the shape of £'s and CCFC simply don't have that or the backing to provide that
Yes the incomes are charged to the bond but currently those incomes are variable and so giving those away affects the bond security. However were CCFC prepared to pay higher (commercial ?) rent over a set term then it would be regular fixed income that adds security to the bond and the income streams become more negotiable. But that would only happen in a long term deal say 10 or 20 years imo
That said I still think Wasps are refusing to go much further because they have been named in the court action in JR2
skybluetony176
Well-Known Member
I wasn't expecting the club to be given them for nothing. It would be part of any long term rental agreement linked to the duration of the naming rights deal. West Ham are believed to be getting £1M a year from the naming rights at the Olympic Stadium because the coverage West Ham give the stadium has a recognised value. http://www.thedrum.com/news/2016/04...amed-mahindra-stadium-part-naming-rights-deal
Whats to stop SISU using the same principle when negotiating with Wasp? Obviously the ammounts are going to be way smaller if for no other reason than West Ham are tied into a 99year rental agreement so the stadium sponsor has security before you even get into that they're a premier league club but is a 10 year rental deal that coencides with a 10 year stadium sponsorship deal that CCFC get's something from by way of reward for the exposure they give the stadium really beyond the rhealms of impossability? I can't see how that wouldn't be in either Wasps or CCFC's interest. Might make stadium sponsorship easier to sell and more valuable with a commitment from the club to stay at the Ricoh for the duration of the sponsorship. And if our on field fortunes carry on improving and we gain promotion to the championship there would be even more exposure and even more again in the premier league (I know I'm dreaming on the last one). I'd say that the club need to think out the box and do things like this to maximise incomes but as West Ham have already set a precident all they have to do is follow that example.
stupot07
Well-Known Member
Also from ccfc perspective, the increased cost of buying access to those revenue streams won't be conterbalanced by the increased income. For example, how much would wasps want to get all 30% of the F&B money? After all because of the compass contract it would only be another £75k.
Re: stadium rights, I think that if we were to agree a long term 5-10 year agreement and the naming rights were aligned to that, then we should get a cut of that as even as a third tier club we promote the Ricoh by virtue of playing their.
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Grendel
Well-Known Member
How have west ham set a precedent? Aren't they the main tenant at the stadium?
oldskyblue58
CCFC Finance Director
Kind of depends if they are after turnover or bottom line doesn't it. What they wont get is given the right to income for free. But if they did get either then the club have a reason to drive the sales rather than sit back and complain about getting much for something that costs them nothing. It is a balance isn't it. Right now I think the club are over valuing themselves to Wasps
Naming rights. Well yes if we agreed a longer term deal (and I think 10 years is going to be minimum) then yes they can argue that. But then its going to be what value CCFC adds and in L1 faltering not much. L1 succeeding its better but at the moment doesn't match Wasps (especially with the increasing TV coverage of Rugby with Wasps one of the top teams). But I would suggest if they get on board they will need some sort of sliding scale to match promotions needs to be negotiated.
Still comes down to CCFC will not get it for free and if not prepared or unable to pay then it aint gonna happen
skybluetony176
Well-Known Member
So? It's about exposure, not tenant status. Football is a far higher profile sport than Rugby. The football club brings exposure to the stadium by simply being there, maybe even more as a league 1 football club than Wasps bring as a premiership Rugby club. That brings value to the naming rights. Are you suggesting that the stadium naming rights for the olympic stadium would carry the same value if West Ham wasn't there or if Leyton Orient had have took it on instead? I seriously doubt that.
CCFC adds value to the profile of the Ricoh in the same way as West Ham adds value to the profile of the Olympic stadium all be it on a smaller scale with ourselves. So the precedent that West Ham have set is that if you bring financial value to the naming rights you deserve to benefit from it financialy in some way. A pretty basic principle I'm sure even you can follow.
torchomatic
Well-Known Member
If we add value, why do they not show they "value" us?
skybluetony176
Well-Known Member
We're there on a deal they inherited. They've made a business case (wether you buy into it or not is a different point) regarding F & B and why there is no more available. I'm just pointing out that there is more than just a bigger share of the F & B. Naming right's just beig one. SISU have an oppurtunity to sell the club to gain the best possible rental deal and I don't buy the wounded soilder act. We have something to bring to the table, CA just has to sell what we do have as part of any negotiation. Maybe my suggestion is part of the 17 points, I don't know. All I know is that not only it can be done it has been done. The model is there and it should be part of any negotiations over a long term commitment to the Ricoh. Also the fact that Ricoh have took out a short extension on the naming rights suggest that Wasps are having difficulty selling the naming rights without a longer term commitment from CCFC otherwise they'd have a fresh deal sorted not an extension. I'm not saying our gun is fully loaded but it does have some bullets in it.
italiahorse
Well-Known Member
Did I get it wrong but don't we share 50 50 with Wasps once Compass have taken there cut ?
torchomatic
Well-Known Member
Yes, I guess so. We get 50% of 30%. 15p in the £.
italiahorse
Well-Known Member
.... and Compass get the 70% because they set the catering up and bought into it ?
Just like we have done with the shop and the programmes.