Midlands Today Last Night (3 Viewers)
- Thread starter torchomatic
- Start date
oldskyblue58
CCFC Finance Director
I think what is being seen at the Ricoh is a shift in how ACL and the arena operate and markets itself.
Originally it was set up so that the club had a stadium and there were seperate events etc for ACL to run. It became clear very quickly that the football club was in long term financial crisis...... it couldnt pay its way had sold its rights to income simply to stay afloat. At that point ACL rather than looking for CCFC to lead the way and create the vibrant income generating area envisaged had to reduce risk and build the conference and other events business. This led to the percentage of income generated by the site by the club becoming ever smaller in percentage terms. The Ricoh, a corner stone of the redevelopment plan, became much more than a stadium for CCFC to play in. That is what created the investment potential. That is where ACL were in April 2012.
Since then they have had to look at different directions, simply because of the risk that the actions of CCFC and SISU posed to the ACL business. SISU have been fighting for their business well ACL have been fighting for theirs also - why expect different. ACL had two problems which were highlighted by the course of action that SISU took. Firstly cash flow - they relied far too heavily on the £1.2m rent from CCFC to meet the financial commitments it had. Secondly as a result of the first relied too much on the notion that the bank loan was safe with Yorkshire bank. The past 9 months have been an eye opener for them in terms of sharper business practice and business loyalty. They have had to react or go under. They chose to react, take their own difficult decisions and to look at different strategies. To look at a future with a football club but no reliance on the money it brings in - even to look at a future without CCFC.
Can they do that potentially yes. Do they want the club gone - no. Do they want a return from the club that is reasonable for ACL - yes.
From what I can make out CCFC generates £1.3m in rental income plus a slice of profits from the joint venture with Compass. The club has first call on the stadium for 9 months of the year - to the exclusion of others pretty much (that may well change). There is a narrow gap in the calendar for stadium events, if they give absolute priority to CCFC. But CCFC usage also affects hotel, car park, exhibition usage - if CCFC are not to act as a partner then perhaps that will change how those things are prioritised to make more money. My understanding is that ACL takes the estate income (the rents, the stadium & hall hire plus stadium sponsorship etc) and the joint venture operates the events/function/ bar/ food etc from which ACL gain a profit share. Of the joint venture profits CCFC forms a small share less than 20%
So ACL have a profit and cashflow shortfall to make up. what can they do? Well the loan - extend the loan lower the rate of interest then I would guess they can half the cashflow going to repay it (say save 800k) and reduce the interest charged against profit also (say 350k). Then they can look at the other overheads - if for example the joint venture does all the marketing and booking etc does ACL need to spend £1m on wages, no not really why duplicate functions so say they can reduce that by £600k that increases profit by the same figure and reduces cashflow by £600k. There may be other less obvious cost savings but if just that were done then I have shown potentially £950k to reduce the lost profit from no CCFC or a £1.4m cashflow saving to offset the £1.3m loss of rental cash flow from CCFC. Bear in mind the joint venture turnover will be down because of the net trade lost if no CCFC but so too will the expenses that relate to gaining that CCFC turnover. Ok the profits from the joint venture might be less for a while but is life without CCFC possible - yes and without adding lots of new events too.
It wasnt the "potential" of CCFC that was the only lure for SISU it was the events stadium also and the profits to be made by a low loan structure and sharper management operation. SISU have achieved both ..... sadly for them not for their benefit.
No it wont be easy for ACL to replace the loss of CCFC income if they had retained the same set up ..... but what this dispute has done is to change that set up in many ways for ACL so that they look at the business and its target markets differently.
Is CCFC essential to the stadium survival - no not any more ....... it has or will become the icing on the cake (the extra profit for ACL) it is no longer the cake itself. Next short term target for ACL is to become football club proof. Certainly the likelihood of the club owning the ground or ACL or even part is pretty remote right now
CCFC get a lower rent :thinking about:is that really as big a success as it seems ?
Originally it was set up so that the club had a stadium and there were seperate events etc for ACL to run. It became clear very quickly that the football club was in long term financial crisis...... it couldnt pay its way had sold its rights to income simply to stay afloat. At that point ACL rather than looking for CCFC to lead the way and create the vibrant income generating area envisaged had to reduce risk and build the conference and other events business. This led to the percentage of income generated by the site by the club becoming ever smaller in percentage terms. The Ricoh, a corner stone of the redevelopment plan, became much more than a stadium for CCFC to play in. That is what created the investment potential. That is where ACL were in April 2012.
Since then they have had to look at different directions, simply because of the risk that the actions of CCFC and SISU posed to the ACL business. SISU have been fighting for their business well ACL have been fighting for theirs also - why expect different. ACL had two problems which were highlighted by the course of action that SISU took. Firstly cash flow - they relied far too heavily on the £1.2m rent from CCFC to meet the financial commitments it had. Secondly as a result of the first relied too much on the notion that the bank loan was safe with Yorkshire bank. The past 9 months have been an eye opener for them in terms of sharper business practice and business loyalty. They have had to react or go under. They chose to react, take their own difficult decisions and to look at different strategies. To look at a future with a football club but no reliance on the money it brings in - even to look at a future without CCFC.
Can they do that potentially yes. Do they want the club gone - no. Do they want a return from the club that is reasonable for ACL - yes.
From what I can make out CCFC generates £1.3m in rental income plus a slice of profits from the joint venture with Compass. The club has first call on the stadium for 9 months of the year - to the exclusion of others pretty much (that may well change). There is a narrow gap in the calendar for stadium events, if they give absolute priority to CCFC. But CCFC usage also affects hotel, car park, exhibition usage - if CCFC are not to act as a partner then perhaps that will change how those things are prioritised to make more money. My understanding is that ACL takes the estate income (the rents, the stadium & hall hire plus stadium sponsorship etc) and the joint venture operates the events/function/ bar/ food etc from which ACL gain a profit share. Of the joint venture profits CCFC forms a small share less than 20%
So ACL have a profit and cashflow shortfall to make up. what can they do? Well the loan - extend the loan lower the rate of interest then I would guess they can half the cashflow going to repay it (say save 800k) and reduce the interest charged against profit also (say 350k). Then they can look at the other overheads - if for example the joint venture does all the marketing and booking etc does ACL need to spend £1m on wages, no not really why duplicate functions so say they can reduce that by £600k that increases profit by the same figure and reduces cashflow by £600k. There may be other less obvious cost savings but if just that were done then I have shown potentially £950k to reduce the lost profit from no CCFC or a £1.4m cashflow saving to offset the £1.3m loss of rental cash flow from CCFC. Bear in mind the joint venture turnover will be down because of the net trade lost if no CCFC but so too will the expenses that relate to gaining that CCFC turnover. Ok the profits from the joint venture might be less for a while but is life without CCFC possible - yes and without adding lots of new events too.
It wasnt the "potential" of CCFC that was the only lure for SISU it was the events stadium also and the profits to be made by a low loan structure and sharper management operation. SISU have achieved both ..... sadly for them not for their benefit.
No it wont be easy for ACL to replace the loss of CCFC income if they had retained the same set up ..... but what this dispute has done is to change that set up in many ways for ACL so that they look at the business and its target markets differently.
Is CCFC essential to the stadium survival - no not any more ....... it has or will become the icing on the cake (the extra profit for ACL) it is no longer the cake itself. Next short term target for ACL is to become football club proof. Certainly the likelihood of the club owning the ground or ACL or even part is pretty remote right now
CCFC get a lower rent :thinking about:is that really as big a success as it seems ?
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covcity4life
Well-Known Member
council fookin the club up
J
Jack Griffin
Guest
Together the club and ACL are larger than the sum of thier parts.
Apart CCFC will die, ACL will be a sick business until such a time as they can bring in a football league club (though we all know it will be CCFC, SISU or no SISU).
The club has to cut a deal on the existing debt and a future rental agreement or SISU will have continue to finance losses.. on you Ms Seppla.
Apart CCFC will die, ACL will be a sick business until such a time as they can bring in a football league club (though we all know it will be CCFC, SISU or no SISU).
The club has to cut a deal on the existing debt and a future rental agreement or SISU will have continue to finance losses.. on you Ms Seppla.
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torchomatic
Well-Known Member
Why is my perspective "interesting"? I want the club to stay at the Ricoh and pay a reasonable rent, one that gives enough income to ACL without crippling the club. That would be suitable to all parties, I would imagine.
J
Jack Griffin
Guest
You are soooooooooooo wrong, the club shot themselves in the head & foot & groin, year on year losses, how can that go on?
Clearly anyone who deludes themselves that ACL cannot survive without the football team, haven't visited the Arena during the week! There are ALWAYS events going on there (be it plumbing or hire firms). They may not be as "glamourous as hosting a football team, but they pay big bucks to hold their conventions or trade shows there.
If anything having the football team there is reducing the potential earnings! All they would need is a roof (wouldn't need to be retractable if no football team) and hey presto its a 365 day event with MASSIVE floor space!
Wouldn't take too much imagination to realise this would far outweigh the loss of less than 100k/month! Indeed they could then attract sponsorship from major corporations rather than the local butcher or pub!
You're just kidding yourself if you think ACL wouldn't survive without CCFC. Why else would a Mayfair Hedge Fund with NO INTEREST in football want to own a share of the arena!
SiSU have been brilliantly outwitted by the Cov City Council - Good on 'em !!
If anything having the football team there is reducing the potential earnings! All they would need is a roof (wouldn't need to be retractable if no football team) and hey presto its a 365 day event with MASSIVE floor space!
Wouldn't take too much imagination to realise this would far outweigh the loss of less than 100k/month! Indeed they could then attract sponsorship from major corporations rather than the local butcher or pub!
You're just kidding yourself if you think ACL wouldn't survive without CCFC. Why else would a Mayfair Hedge Fund with NO INTEREST in football want to own a share of the arena!
SiSU have been brilliantly outwitted by the Cov City Council - Good on 'em !!
torchomatic
Well-Known Member
Oh my mistake. I look forward to the "Mayfair Hedge Fund" and the club being thrown out so that the Ricoh Arena becomes the Premier Plumbing venue in the country.
Mutton will be as proud as punch.
Mutton will be as proud as punch.
davebart
Active Member
In a nutshell what ACL are saying is correct.
The rent that SISU wish to pay is now so low that ACL could manage without it.
A couple of big concerts would probably pay the same.
15000 people out of the entire population of Coventry go to the matches. ACL has a responsibility to them not just the fans.
The rent that SISU wish to pay is now so low that ACL could manage without it.
A couple of big concerts would probably pay the same.
15000 people out of the entire population of Coventry go to the matches. ACL has a responsibility to them not just the fans.
Hugh Jarse
Well-Known Member
Please indulge me a while, playing Devil's Advocate here.
Are we saying that our rent should be reduced because we became shit and got relegated? Is that really the nub of things?
The facilities, if anything, have got better since we agreed a fee for the stadium so, in a real world business scenario, why does that entitle us to the right of a reduced rent just because we are Coventry City?
Are we saying that our rent should be reduced because we became shit and got relegated? Is that really the nub of things?
The facilities, if anything, have got better since we agreed a fee for the stadium so, in a real world business scenario, why does that entitle us to the right of a reduced rent just because we are Coventry City?
torchomatic
Well-Known Member
I guess because having a professional football club brings a lot of money into the local economy; jobs, opposition fans, fans (like me) who would never be seen dead in Coventry otherwise, the wealthy footballers spending their cash....
How deluded does someone have to be to think a local chip shop is going to be less lucrative than say Barclays bank!
No one has said they would WANT the club to leave, but to say that ACL couldn't survive without CCFC is quite frankly laughable.
But it is just a simple fact of business that multi-national companies have significantly bigger advertising budgets than the local chippy!
How ignorant do you have to be to not get that!
OH and as for your quip about a plumbing venue (totally deluded and wrong - as it would be a EVENTS venue - but hey the ignorant never actually READ), HOW is that any worse than being known as the RICOH!!
Or am I missing the link between football and a photocopier manufacturer?
Unless the stadium was known as the coventry city football club stadium, then it will ALWAYS bear no relation to the team!
Its laughable how much of a fuckwit YET AGAIN Torch has shown himself up to be!
WOW you're totally right! The local community really benefits from the 100 - 1000 away fans that come around once a fortnight!
Or are you referring to the several minimum wage staff serving food (who incidentally would need MORE of it more events were being held). Oh and not forgetting the "wealthy" League 1 players (most not living in COV BTW).
It's so laughable how ignorant Torch Truly is!
Even on the jobs argument he's wrong, as with more events comes more need for staff to support them!
What a tool!
torchomatic
Well-Known Member
While that may be true; I would probably take that from most people on here - I respect 'em, you see - coming from you that's a bit rich!
As for the your Photocopier manufacturer bit, do you think they would have given £10M for sponsorship if it just a local exhibitions venue? I don't think so. They sponsored because of the football club.
As for the your Photocopier manufacturer bit, do you think they would have given £10M for sponsorship if it just a local exhibitions venue? I don't think so. They sponsored because of the football club.
torchomatic
Well-Known Member
I tell you what then. Ask Tescos and other retailers how much their takings go up when there's a match on.
I'm bored of all this now, ACL and the Hedge Fund Coonts will come to an agreement sooner or later for the good of both parties. Of course ACL want the extra revenue from CCFC and so do all the other ancillary business partners...........Compass, Casino, parking, local pubs and clubs etc.............and of course City want to play in a fantastic stadium where they can accommodate tremendous crowds and benefit from a fabulous pitch and facilities. Its just down to Joyless to climb down off her high horse and stop her devious ambitions to acquire the complex for SISU's own profit gain and exit strategy and come to a realistic agreement based on what they owe and what they can realistically afford in the future. The club have taken some positive strides since employing MR and allowing him to build his side, SISU should build on this if they want to recoup their earlier losses.
blueflint
Well-Known Member
we all agree that the arena without football would a catastrophe for city it would not bother acl they could and would survive without us.more concerts big stars coming etc.only one a month they would be quids in
oldskyblue58
CCFC Finance Director
Bottom line is it isnt good for either ACL or CCFC for the club to leave the Ricoh. Both should be better off together.
ACL are saying they want the club there but their actions tell us that it is not any cost, they can survive without. They want a reasonable rent for a very good stadium
CCFC need the income potential of larger crowds to survive or progress and a reasonable lower rent
balls in SISU's court as far as I am concerned right now. Get a deal done and lets move the club forward on a stable basis
ACL are saying they want the club there but their actions tell us that it is not any cost, they can survive without. They want a reasonable rent for a very good stadium
CCFC need the income potential of larger crowds to survive or progress and a reasonable lower rent
balls in SISU's court as far as I am concerned right now. Get a deal done and lets move the club forward on a stable basis
Bill Glazier
Active Member
Agreed. Sisu could have half of it too. So why aren't they signing up?
Mucca Mad Boys
Well-Known Member
I work at Pizza Hut and I can tell you, the store looks forward to match days in terms of bringing revenue, AND, the store has lost revenue because the club only gets 10k fans as when we were getting 20k+ the store was 'rammed'. Local areas benefit massively from CCFC and other events at the RICOH.
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torchomatic
Well-Known Member
blueflint
Well-Known Member
dont you read whats being said then.the club fooked itself up sisu made it worse.sisu have reduced the clubs running costs by selling players and assets not the council
MichaelCCFC
New Member
Interesting - cos you have a different view to lots on here. Maybe it's being a city fan for 40+ years that means I always fear the worse but are sisu suddenly going to compromise? And 'reasonable' can mean many things - what figure do u hv in mind?
torchomatic
Well-Known Member
Oh, I see. The crime of having a different view. Guilty.
Been a fan myself for 40. Always looked on the bright side. As for figures, it's not for me to say, is it? It's up to City and ACL.
Been a fan myself for 40. Always looked on the bright side. As for figures, it's not for me to say, is it? It's up to City and ACL.
deanocity3
New Member
http://www.bbc.co.uk/iplayer/episode/b01pvkl7/Midlands_Today_16_01_2013/
here is the link
on around 7mins
here is the link
on around 7mins
Mary_Mungo_Midge
Well-Known Member
You may count them as 'one offs' Torchy, such at the Springsteen and Muse concerts; but the problem with that line of debate being they keep on pulling out 'one offs'. Take That, Oasis, Bon Jovi, Pink, Kings of Leon, Red Hot Chilli Peppers..... All 'one offs' I take it?
Olympics? Yeah, a one-off. But they've also got their hat in the ring for the egg-chasing World Cup of 2015. And doubtless others to follow.
And if they do continue to develop the 'smaller scale' exhibition capacity; they really could have a genuine 'CCFC-less' future.
They don't have an obligation to host the football club. So, rather than simply pour scorn on their business plan; what if you believe it? Just make that step-change for a moment for the purposes of considering the opther side.
And what then, if they become so tired of SISU's stance, that they simply evict the club at the end of the season for non-payment of rent?
What then? Seriously...
Olympics? Yeah, a one-off. But they've also got their hat in the ring for the egg-chasing World Cup of 2015. And doubtless others to follow.
And if they do continue to develop the 'smaller scale' exhibition capacity; they really could have a genuine 'CCFC-less' future.
They don't have an obligation to host the football club. So, rather than simply pour scorn on their business plan; what if you believe it? Just make that step-change for a moment for the purposes of considering the opther side.
And what then, if they become so tired of SISU's stance, that they simply evict the club at the end of the season for non-payment of rent?
What then? Seriously...
dongonzalos
Well-Known Member
Any team that can supply 10k fan base that are willing to pay any rent. Are currently better for ACL than what they have
torchomatic
Well-Known Member
Agree, MMM. I'm not saying they couldn't survive without City, but I think they'd certainly miss us.
Yes, you've listed a good few year over the last eight years. They are all one-offs and while they certainly bring in income, it's not regular and doesn't continue through the winter, though they can have smaller indoor concerts.
Having your hat in the ring is not the same as actually getting the events. With City they are guaranteed a certain amount of matches plus extra revenue (via refreshment sales) from Cup matches, etc.
I think the ACL stance of we can do without 'em is bluff and bluster. Who knows if Ricoh would want to sponsor a stadium that for the majority of the year only hosted a handful of concerts and wedding fares - yes, I'm being pedantic.
Seriously, I don't think ACL would survive without them. But that's just my opinon and I could, obviously, be wrong.
If the club were chucked out and think it would be bad for ACL, bad for the city, bad for the Council and bad for Captain Mutton, so I don't think we'll ever find out.
Yes, you've listed a good few year over the last eight years. They are all one-offs and while they certainly bring in income, it's not regular and doesn't continue through the winter, though they can have smaller indoor concerts.
Having your hat in the ring is not the same as actually getting the events. With City they are guaranteed a certain amount of matches plus extra revenue (via refreshment sales) from Cup matches, etc.
I think the ACL stance of we can do without 'em is bluff and bluster. Who knows if Ricoh would want to sponsor a stadium that for the majority of the year only hosted a handful of concerts and wedding fares - yes, I'm being pedantic.
Seriously, I don't think ACL would survive without them. But that's just my opinon and I could, obviously, be wrong.
If the club were chucked out and think it would be bad for ACL, bad for the city, bad for the Council and bad for Captain Mutton, so I don't think we'll ever find out.
torchomatic
Well-Known Member
So you keep saying, but where are they? Who are they? I asked you earlier, name one homeless sporting team willing - and more importantly be able to afford - to move into the Ricoh.
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Mary_Mungo_Midge
Well-Known Member
Again, I wouldn't disagree with you; but if I were to rank the level of negativity on a 'bad-o-meter', it'd be worse for the club than any or the other parties you mention by some considerable distance. Such are the stakes SISU are playing with here. And to give a context here, the value of the rent is lower now that the value of the 12-month contract extensions offered by Waggott to both Cranie and Clingon in June 2012.
Strange they're prepared to go to the wire for less than thay wanted to give Sideways Sammy last summer, eh?
torchomatic
Well-Known Member
Yes, and bad for Coventry City. How could I have missed them off the list!?:facepalm:
Again, I wouldn't disagree with you; but if I were to rank the level of negativity on a 'bad-o-meter', it'd be worse for the club than any or the other parties you mention by some considerable distance. Such are the stakes SISU are playing with here. And to give a context here, the value of the rent is lower now that the value of the 12-month contract extensions offered by Waggott to both Cranie and Clingon in June 2012.
Strange they're prepared to go to the wire for less than thay wanted to give Sideways Sammy last summer, eh?
Brighton Sky Blue
Well-Known Member
Surely what both sides must ultimately want is for the football club to be successful, bringing in bigger crowds and more revenue, and for the stadium to be associated with the club's success, rather than as at present being the oft cited reason for its failure. ACL have offered a serious rent concession, and now the main impetus has to be from the club to achieve what we'd all like to see.
Mary_Mungo_Midge
Well-Known Member
Too busy warming Fisher's slippers, I guess... ;-)
torchomatic
Well-Known Member
Mary_Mungo_Midge
Well-Known Member
Concourse Stella pumps attended by topless beauties?
The last word hopefully preventing any Thorn-japery...