Sorry your missing the point. They can’t pay back the bond owners back as there there operating profit isn’t enough. You can talk about the gates but there a huge numbers of free tickets included which is dressing up the attendances.
I think the majority agree somethings around the corner for Wasps... and it’s not good.
Sorry to be blunt but you are missing the point by hanging on to a falsehood..You are starting from the wrong premise. There never was an intention to repay the bonds from operating profit (which is the wrong term in any case)
There is no way on gods earth that the business could generate £35m surplus cash flow in 7 years. Wasps directors & owners knew that in 2015 as did the bond underwriters, the bond trustees, the finance houses, the valuers, the auditors, and any finance professional that looked at the financial data and prospectus properly. The first clue for anyone not choosing to look at the financials & prospectus is the fact that Wasps bought time to generate cash flow by setting aside £4.6m of the bond to pay the first 2 years bond interest, if they were not confident of paying the first two years interest then there was no way they were thinking of putting aside £5m per year to accumulate for 7 years £35m. The thing about all that is that the underwriters, bond trustees and auditors also needed to be sure the investment was safe, including repayment, within the risk scenario identified - if they were not sure then the bond issue would have failed because those professionals would not have backed it. Those professionals get it wrong and they could become liable for the repayment so they have an incentive to investigate and to be as sure as they can be
Had the business been capable of producing such surplus cash flow then the bond issue probably would not have been necessary in the first place. Loans could have been paid down directly, assets financed directly and left a much reduced interest charge for a short period after which there would be no charge. Had the business needed to finance things then with such surpluses banks and other lenders would have been falling over themselves to lend Wasps the money. What the bond has done is to buy time to build value and a track record for the business, from which various options for bond repayment become available. I have identified a possibility on another thread that repays in full and produces cost savings in a structured manner as a for instance.
Just because it makes a nice headline in the CT or Observer doesn't actually make it entirely accurate (not unusual). No they can not repay the bond in 2022 out of the business operating profit........ but thats the wrong term and they never intended to in the first place. To think they did have such an intention is a complete nonsense. Sometimes you have to look at the real facts and apply what is known or possible. The CT article does at least have three finance professionals that make it clear that refinance would be necessary and expected ie not repaid from cash flow.
Huge numbers of free tickets may well be available. What is the actual uptake on those free tickets - we do not know. If we do not know then we have no idea as to how they affect the attendance. Its just hopeful guesswork with a particular agenda.
Sports turnover 2015 was £9m out of a total turnover of £21.4m 2016 it was £12.3m out of a total turnover of £31m and the 6 months to 31/12/2016 it was £8.4m out of total turnover of £17m (during that 2016/17 season the average crowd increased to 21k so for the full year to 30/06/2017 not unreasonable to think total sports income perhaps touched £16m). So far this season we have no financial information but we know average crowds for the first four matches has increased year on year although in like for like fixtures they are down 19%. Extrapolating that then sports income could end up being £13m this season. There is of course an element of at least £5m that is guaranteed receipts from central distributions whether there is attendance or not. So given all these free tickets that distort attendance figures and have done ever since 2014 when they came here, where has their income come from? Even if the free tickets are taken up it doesn't mean there is no income because of the secondary spend that takes place.
You keep saying Wasps are going to go bust soon, "i am never wrong on these things" I believe was the expression somewhere on this thread. At least back it up with something other that hearsay and anecdotal assurances. I am willing to be convinced. So far i have seen no evidence produced that is not capable of at least one alternative interpretation.
Do most people think there is something bad that is close for Wasps?, i doubt it because most people, including me, haven't got a clue as to their current finances or immediate financial future or plans (short medium or long term). They might hope for it but most people have no idea of the facts and therefore the prospect of it happening. Indeed a lot of people frankly don't care
Sorry as much as people put forward hope as fact i do not see Wasps going bump any time soon, if ever. They have risks and problems to overcome definitely, same as any business, but are they terminal - I have seen no actual evidence that suggests that is the case.
In any case the more important concern for me is the effect of all that on CCFC for the next 5 years. Can CCFC afford to wait that long?
