ACL and the City Council announcement (18 Viewers)

[dongonzalos]

All the council have been asking all along us that they pay a reasonable rent and that they show what their short and long term business plan for the club is.

SISU have never been able to show this business plan have any if you, who are angry at this decision asked yourselves why?

 

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[dongonzalos]

If this means SISU have to play by the councils rules for a bit. Then thank god.
The council want CCFC to try to get to break even point but also try and compete. That is what SISU say they want as well.
If it means SISU get up and wall away ( it won't)

Someone will see CCFC and an opportunity to have a nice friendly business arrangement with the council as a very good opportunity.

It will not be the end if the world.

 

[Godiva]

Grendel:

Many of us support the council's action because we could easily envisage the following scenario:

1. ACL file for bankruptcy due to cash flow problems caused largely by SISU's non-payment of rent.

2. As a sitting tenant, SISU buy the lease from the administrator relatively cheaply.

3. SISU sell the lease to a third party who plans to make money from the existing development plus develop the surrounding land.

4. CCFC remain a sitting tenant paying a high rent to the new owner.

5. SISU put CCFC into administration and exit the scene.

Presumably as a CCFC fan, you would not wish to see this scenario unfolding right? Then either you think the above scenario is completely unrealistic or you do not care about the future of CCFC. Please enlighten us as to which is the case as many of us are concerned about SISU's true intentions.

Re 3:
How big a profit would sisu potentially make on that transaction? £5m? £7m?
If there is a third party, why wouldn't they buy the lease directly from the administrator?
That way a bidding war over the lease would eliminate most potential profit sisu could hope to make.

Re 5:
Wouldn't it have been cheaper for sisu to just liquidate the club a year ago and save the losses from then till now?

There was always a chance that the council or 'a third party' could take over the mortgage. Sisu being finansiel experts will surely have anticipated that.

 

[Mary_Mungo_Midge]

The Alan Higgs Centre is completely separate from the Higgs Charity, ACL, the Ricoh Arena etc. It is managed by Coventry Sports Foundation and was built to provide a community sports and leisure centre in that part of the City.
It has been the home of the CCFC Academy since 2003. Seppala/Fisher etc have not paid the charges due.

edit:http://www.covsf.com/

Now that's a disgrace

 

[Mary_Mungo_Midge]

We are no closer to extiction than 5 years ago. I have never "condoned" or supported SISU either and your rather juvenile asides are becoming tiresome.

You know little of the structure of the finances of the club to claim such. Five years ago, administration loomed, not extinction. Now, administration is not even an option. If you think the situation now is akin to that of five years ago; the demonstration of your ignorance has today reached hitherto unexplored heights

 

[oldskyblue58]

Wouldnt be the first time that CCFC has been late or reluctant to pay for the academy rent. Nor would it be the first time the academy got locked out because the rent wasnt paid.

Surely even SISU must realise the academy is the future of the club and needs protecting ....... if the academy is locked out they cant train, cant play fixtures, players will leave, others wont want to come and we lose the £500k funding grant, and then finally lose the academy which makes the clubs future bleaker

This is entirely seperate issue to the Ricoh rent but does it indicate where SISU are going with the club right now? What other bills are delayed or not paid?

 

[smouch1975]

Calm down and check out my new number plates

 

[dongonzalos]

Awesome

 

[LilleSkyBlue]

Calm down and check out my new number plates

Great plates but some selfish parking

 

[Jack Griffin]

@dongonzalos - Yeah I agree, thats pretty much what I've been saying. I don't condone bullying & neither should anyone else.

Grendel et al will be saying 'might is right' next if it benefits SISU!

 

[cloughie]

So with what justification are Sisu not paying for using the facilities at the Alan Higgs centre?

Anyone care to defend them on that point?

And also shows what a load of tosh and how ingenuine waggots statement regarding CCFC working closer with the community was.

The Higgs centre is a facility for the benefit of the community, would love to know how not paying the charges due to the Higgs centre enhances the community.

 

[cloughie]

Whitehall make the cuts but the Council wholly decides where the axe falls, so don't try and make out that CCC are whiter than white. Get rid of the Chief Exec. That would save a few libraries and youth centres.

I no way would i suggest that the council is whiter than white. The point is £60 million cuts are imposed by whitehall and yes the council do have to decide what and where the cuts are applied. The trouble is where ever they make a cut whoever it affects will say it is the wrong place to make a cut.

How can the council afford to invest £14 million when making these cuts? They are borrowing the money at a preferential rate and charging ACL a slightly higher rate which is still below what yorkshire bank was charging.

So the £14million does not affect the council budget

 

[Jack Griffin]

Not only that, but they have the Arena and the leasehold itself as security.

 

[skyblueman]

I no way would i suggest that the council is whiter than white. The point is £60 million cuts are imposed by whitehall and yes the council do have to decide what and where the cuts are applied. The trouble is where ever they make a cut whoever it affects will say it is the wrong place to make a cut.

How can the council afford to invest £14 million when making these cuts? They are borrowing the money at a preferential rate and charging ACL a slightly higher rate which is still below what yorkshire bank was charging.

So the £14million does not affect the council budget

Like most councils you'll find they are sitting on a big piles of cash - so yes they can do this sort of thing and yes they could use it to subsidise services if they wanted I guess

 

[cloughie]

Like most councils you'll find they are sitting on a big piles of cash - so yes they can do this sort of thing and yes they could use it to subsidise services if they wanted I guess

yes they do have 'piles of cash to sit on' they are known as reserves and they have to be kept to a certain amount by law, so unfortunately they cannot use them to susidise services

 

[ashbyjan]

This money has not come from Council reserves but because of the unique credit rating of councils they can get very favourable loan rates from the Public Loans Work Board, this is below the usual commercial rate and they have then lent this on to ACL at a slightly higher rate. Thus the council makes a bit on the loan and secures its major asset from possible financial problems and hostile takeover. ACL how has a stronger cash flow position and is now able to offer CCFC a lower rent. Seems like its win - win - win for all. Unless the theory of SISU trying to distress ACL for a takeover are true in that case they have been stopped in their tracks. But they have always claimed its about the rent so this is good news all round.

 

[fernandopartridge]

Shrewed move!
Removes completely any threat of ACL going bust.

Now it's up to sisu to show their hand.

Why are ACL as a private company OK to be bailed out by the taxpayer but CCFC are not?

 

[covcity4life]

Why are ACL as a private company OK to be bailed out by the taxpayer but CCFC are not?

LAWYEREDimp:

 

[Brighton Sky Blue]

Well at least we know where the money is coming from. We also know that our esteemed Tim has taken actions against a charity-the bloke's stock just gets higher by the day.

 

[ashbyjan]

I am sure the council have made sure its 100% legal and I am equally sure SISU's lawyers will be searching high and low for a loophole as we speak. Personally I would see it more as the council protecting a 50% council owned company that leases from a 100% council company - basically council protecting it own investment.

 

[Flying Fokker]

Why are ACL as a private company OK to be bailed out by the taxpayer but CCFC are not?




They probably could. But would you work with them. A hedge fund. Far better to work with Higgs and ACL on keeping the community of Coventry's intersts in tact.

 

[skyblueman]

yes they do have 'piles of cash to sit on' they are known as reserves and they have to be kept to a certain amount by law, so unfortunately they cannot use them to susidise services

I'm not expert on council funding but what would be the point of having reserves that had to be kept by law at a certain level? I mean obviously you couldn't use them for anything could you?

 

[Jack Griffin]

Why are ACL as a private company OK to be bailed out by the taxpayer but CCFC are not?

This is a fairly safe investment that
a) makes money for the council in the long term.
b) protects the Arena against a hostile take over
c) Is secured against the bricks & mortar of the Arena itself
d) Is in the interests of the people of Coventry.

None of the above apply to a loan to CCFC, they have virtually no assets, you can't secure a loan like that against Gary McSheffry & David Bells contracts!

Risk assesment over.

 

[oldskyblue58]

Why are ACL as a private company OK to be bailed out by the taxpayer but CCFC are not?

Probably because what they are doing is protecting one of their own assets. The council invested in the project and that investment would be lost if ACL failed and was sold to a third party

The Ricoh is a cornerstone of the North Coventry redevelopment project. The council has much at stake

The council have taken advantage of an investment opportunity. In very short term using reserves but then borrowing at very low rates to then loan to ACL at a higher rate. Making a return on investment and for the first time actually earning something other than rates from the site.

The investment or loan doesnt affect jobs or revenue budgets negatively at the council. In fact because they get a return on investment then there is slightly more in the pot

The loan has security - the council own the lease as ACL's landlord and own the freehold. If ACL were still to fail then the council retain the asset and could lease the complex to another party for an annual rent (they dont get a rent at the moment because they received a one off rent premium £21m instead). They may even insure against the risk of ACL failure. But it might also suggest that what ACL have said about their activities not being reliant on the club and that going forward they will set up to be football club proof has some real truth to it. That would make it a sound investment for the council.

ACL make profits and have a plan forward

Councils have strict investment criteria so could they invest in the football club........

Well there is no security to offer the council....

There is a very poor financial track record ......

A history of losses and failure to control finances ......

No evidence provided of the clubs plan forward as far as we know ......

No evidence of the finances to support the plan forward......

Investing money in a football club we all know is high risk......

buying the club would immediately mean the council taking responsibility for the debts and losses.....

The club couldnt afford to pay the interest on the loan (which would probably be more than the latest proposed rent deal)........

The rent would be in addition to the loan interest so adding more cost and losses to the clubs financials and making the investment by the council even more risky..........

The club could not afford it and the council would have to rely on SISU for repayment of the loan (they, SISU, dont exactly have a good track record on those sort of things as far as council is concerned)

The council do not actually trust the owners of the football club........

The recent events since April 2012 means that the goodwill towards the club in its current ownership has been eroded ......


So investment in a loss making, over spending, under performing, criitically poor credit risk of a club really is not an option for the council....... even if council rules etc permitted it

 

[rupert_bear]

In other words OSB58 the council/ACL have well and truly shafted SISU !!

 

[oldskyblue58]

In other words OSB58 the council/ACL have well and truly shafted SISU !!

Lets just say backed them into a tight corner ............. i doubt SISU will take this laying down

I think what ACL and its stakeholders have done is to protect their interests, which is entirely right and proper. I think SISU have tried to do the same.

In terms of shafting then I think much of it has been self inflicted in SISU's case ........

sorry but the thought of shafting and SISU, Joy, Tim , etc conjure images I would rather not keep .........

 

[SkyBlueCharlie]

And also shows what a load of tosh and how ingenuine waggots statement regarding CCFC working closer with the community was.

The Higgs centre is a facility for the benefit of the community, would love to know how not paying the charges due to the Higgs centre enhances the community.

Cloughie...I notice that no-one has leapt in to defend or justify SISU's stance here. Says a lot doesn't it?

 

[Godiva]

Shrewed move!
Removes completely any threat of ACL going bust.

Now it's up to sisu to show their hand.

Why are ACL as a private company OK to be bailed out by the taxpayer but CCFC are not?

Actually I didn't say anything about it being 'ok' or not.
I said it was 'shrewd'.
Which it is.

A move I never saw coming, but then I am not a financial expert. A move that none on this board mentioned as a possibility, and there are a couple with financial expertise here.
When somebody does something completely unexpected, you need to recognise that.

A lot is being said about this action protecting the councils investment, but didn't it also save Yorkshire Bank from a potential loss?

 

[Jack Griffin]

Yeah, the Yorkshire Bank will be well happy to liquidise that loan.. especially as they are in trouble themselves.

http://www.guardian.co.uk/business/2012/oct/31/clydesdale-yorkshire-bank-bad-debts

 

[GaryPendrysEyes]

Coventry City 1 Sisu Mayfair 0

 

[torchomatic]

I think you mean Coventry City Council 1 SISU Mayfair 0

Coventry City 1 Sisu Mayfair 0

 

[Jcap]

I'm not expert on council funding but what would be the point of having reserves that had to be kept by law at a certain level? I mean obviously you couldn't use them for anything could you?

I'm no expert either but would guess they need a certain level in case of emergencies, disasters and so on? Same reason people (well most at least) keep savings in the bank. Of course if for some reason they had to be used then I imagine they would need to be topped up again at some point.

 

[cloughie]

I'm no expert either but would guess they need a certain level in case of emergencies, disasters and so on? Same reason people (well most at least) keep savings in the bank. Of course if for some reason they had to be used then I imagine they would need to be topped up again at some point.

Beat me to it...correct

 

[dongonzalos]

Actually I didn't say anything about it being 'ok' or not.
I said it was 'shrewd'.
Which it is.

A move I never saw coming, but then I am not a financial expert. A move that none on this board mentioned as a possibility, and there are a couple with financial expertise here.
When somebody does something completely unexpected, you need to recognise that.

A lot is being said about this action protecting the councils investment, but didn't it also save Yorkshire Bank from a potential loss?

I think one person on here hinted at it. OSB when SBT said he would be proved right regarding SISU's tactics.
OSB suggested something else was afoot

 

[torchomatic]

http://www.bbc.co.uk/news/uk-politics-20613183

Warwickshire County Council for example has around £55M in its reserves.