Mark Labovitch re administration (15 Viewers)

[duffer]

In essence it is - that is the madness of it all. Dont want to pay any back rent, CCFC want 100% of car parking and f&B, they want break clauses in the agreement to be able to leave if they want and they want access to details of the deal council did on loan as they claim they need it for FSA reasons

FSA reasons? That's a new one to me. It might be true, but I'd like to see the chapter and verse on it.

I can tell you a crystal clear FSA regulation though...

identification of beneficial owners and the verification of the beneficial owner's identity

This one I know, because I work in banking and this regulation in particular is brought to our attention at regular intervals (purpose: to prevent opaque structures registered wholly or in part in de-regulated territories, from laundering money).

I'm not suggesting SISU are into money-laundering, but I wonder how keen they might be to pass details of our true 'beneficial owner' onto ACL for 'FSA reasons'?

 

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[Otis]

Blimey. The punishment for that's got to be more than a ten point deduction




Bet most of the keepers in that league can't catch anything and have to punch everything out because they only have stumps.

 

[ashbyjan]

Rob - you are right. They could still do a deal for a new licence/lease for CCFC to still play at Ricoh but if they cannot agree one why would they get a better deal in future - the new deck would be stacked in ACL's favour (if you believe ACL can survive without CCFC) and doubt if they would offer them a better deal than is currently on the table, so surely its easier to just get a deal done now.

 

[theferret]

What the club actually seem to want is not just 100% of the profit of IEC but the profit Compass make on supplying the goods to IEC - approx £200k. Are Compass likely to agree to that?

Do we know that for sure?

I do not pretend to understand the full complexities of the deal with ACL & Compass and only have your word for what you say the specifics of the demands are.

My reading of it is that they simply want access to all catering profits generated by the football club.

I don't know, but my suspicion is that the main obstacle to a deal being done is the writing off of the current rent arrears and that the F&B issue is a bit of a red herring and is an issue that could easily be overcome with a bit more dialogue.

 

[Ashdown1]

Haven't they offered to amortize the arrears over 10 years anyway??

 

[RoboCCFC90]

Rob - you are right. They could still do a deal for a new licence/lease for CCFC to still play at Ricoh but if they cannot agree one why would they get a better deal in future - the new deck would be stacked in ACL's favour (if you believe ACL can survive without CCFC) and doubt if they would offer them a better deal than is currently on the table, so surely its easier to just get a deal done now.

Probably not so in SISU's eye's its probably why they are holding off till the end of the season as then they can place the club into Admin without affecting the clubs performance the downside on that is that we have a mountain to climb next year but if we don't go up then there is no way we won't turn it around.

Back to the answer you have provided you're right this siuation would be in favour of SISU and ACL's resolve would be tested, as well as how desperate ACL would be for CCFC to be tennats at the Ricoh Arena. SISU could agree to better terms on revenue streams on there terms and paying a rent fee suitable to them, while benefiting from the new terms they would hold ACL too, but this is all a stab in the dark of course but it would make sense if this is the path that SISU went down..

 

[Mary_Mungo_Midge]

Do we know that for sure?

I do not pretend to understand the full complexities of the deal with ACL & Compass and only have your word for what you say the specifics of the demands are.

My reading of it is that they simply want access to all catering profits generated by the football club.

I don't know, but my suspicion is that the main obstacle to a deal being done is the writing off of the current rent arrears and that the F&B issue is a bit of a red herring and is an issue that could easily be overcome with a bit more dialogue.

The arrears are a function of Fisher's tactic of skipping from one crazed notion to another. A few hours at the negotiating table instead of trips to Rushden and Diamonds and this could perhaps have been solved months ago. The longer it's been protracted, the greater the arrears, the less likely a solution is to be found

 

[ashbyjan]

1. The timing of admin is not SISU's to decide - the moment a company is trading insolvently which CCFC Ltd is, as no negotiations are taking place, the Directors are personally liable as they would be deemed to be knowingly running an insolvent company.
2. I think ACL would be in the stronger position as they believe they don't need CCFC to survive and CCFC are homeless and looking for somewhere - cannot see SISU getting a better deal than what is being offered now in those circumstances.

 

[ashbyjan]

Do we know that for sure?

I do not pretend to understand the full complexities of the deal with ACL & Compass and only have your word for what you say the specifics of the demands are.

My reading of it is that they simply want access to all catering profits generated by the football club.

I don't know, but my suspicion is that the main obstacle to a deal being done is the writing off of the current rent arrears and that the F&B issue is a bit of a red herring and is an issue that could easily be overcome with a bit more dialogue.

That is the match day f&B - not even SISU would demand the f&b money from concerts and conferences - oh bugger we've just given Fisher a new idea!!!

 

[theferret]

1. The timing of admin is not SISU's to decide - the moment a company is trading insolvently which CCFC Ltd is, as no negotiations are taking place, the Directors are personally liable as they would be deemed to be knowingly running an insolvent company.
2. I think ACL would be in the stronger position as they believe they don't need CCFC to survive and CCFC are homeless and looking for somewhere - cannot see SISU getting a better deal than what is being offered now in those circumstances.

ACL are deluded if they think they can survive without the football club, certainly not with the current business model.

I have said this before, but I have heard from a source at Ricoh UK that they would withdraw from the naming rights deal if the football club leave or are forced out.

How ACL could survive with the loss of CCFC and Ricoh (not to mention Compass who would surely want to renegotiate their contract) is a mystery. Perhaps they have something up their sleeves, but I seriously doubt it.

 

[sky blue john]

That is the match day f&B - not even SISU would demand the f&b money from concerts and conferences - oh bugger we've just given Fisher a new idea!!!

I'm sure he has that idea already !!!!

 

[RoboCCFC90]

1. The timing of admin is not SISU's to decide - the moment a company is trading insolvently which CCFC Ltd is, as no negotiations are taking place, the Directors are personally liable as they would be deemed to be knowingly running an insolvent company.
2. I think ACL would be in the stronger position as they believe they don't need CCFC to survive and CCFC are homeless and looking for somewhere - cannot see SISU getting a better deal than what is being offered now in those circumstances.

True.. We don't know who holds the cards in this situation or indeed if this is SISU's motives but I for one just hope this gets sorted.

 

[Mary_Mungo_Midge]

ACL are deluded if they think they can survive without the football club, certainly not with the current business model.

Their auditors tend to disagree with you, having just signed off their accounts. The issues you raise aren't rocket science and would have been considered as part of the viability plan moving forward

 

[RoboCCFC90]

Their auditors tend to disagree with you, having just signed off their accounts. The issues you raise aren't rocket science and would have been considered as part of the viability plan moving forward

MMM If I am not mistaken those accounts were for last year when CCFC were still paying the rent.. I may be wrong this, but I am looking forward to seeing there accounts for this year. Also if ACL were on such a healthy financial position why did CCC borrow them £14,000,000 to pay off Yorkshire Bank? I am sure most sponsorships would probably leave if CCFC were to stop playing there Football Matches there, yes okay there would be events being held by ACL using the Arena, but CCFC is the biggest advertisment for the Arena not to mention brings all the sponsors in..

 

[theferret]

That is the match day f&B - not even SISU would demand the f&b money from concerts and conferences - oh bugger we've just given Fisher a new idea!!!

I am aware that it is matchday f&b, I'm not sure why you thought you needed to explain that.

So CCFC/SISU want access to profits that they generate? Again, it is a perfectly reasonable position. A company I work for has a corporate box, and every year their F&B bill alone is getting on for £6,000. That company is there to watch the football club, and the club work very hard every year to convince them to renew the box. Why shouldn't the club receive the proceeds of money spent by their customers? That is like renting a shop unit to someone and then saying you can keep most of the money your customers spend, but we have already promised some of their money to another company entirely. Absurd.

Like I say, I have no idea about how easy that would be to facilitate owing the arrangement between Compass/ACL, but I suspect it is feasible otherwise SISU wouldn't allow it to become such an obstacle. I also suspect Compass (if they have their head's screwed on) would see no benefit in allowing the football club to disappear, so I would be very surprised if they would not be at least a little bit flexible.

F&B is a complete red herring. ACL should lay their cards on the table. What is the key argument that is stopping a deal being done, and what are the objections?

 

[theferret]

Their auditors tend to disagree with you, having just signed off their accounts. The issues you raise aren't rocket science and would have been considered as part of the viability plan moving forward

It would remain viable only in the sense that the city council would not call in the debt should ACL default on repayments to them. Had they still owed the money to Yorkshire Bank directly, then their viability post CCFC and Ricoh exit would not be so clear-cut.

The moment is does default, it becomes a facility that is subsidised by the taxpayer, whereas up until now if has been entirely self-sufficient.

 

[Mary_Mungo_Midge]

MMM If I am not mistaken those accounts were for last year when CCFC were still paying the rent.. I may be wrong this, but I am looking forward to seeing there accounts for this year. Also if ACL were on such a healthy financial position why did CCC borrow them £14,000,000 to pay off Yorkshire Bank? I am sure most sponsorships would probably leave if CCFC were to stop playing there Football Matches there, yes okay there would be events being held by ACL using the Arena, but CCFC is the biggest advertisment for the Arena not to mention brings all the sponsors in..

It was for the year ending May '12. Profits were circa £1.1m with the club plying £1.2m in rent. So it appears borderline profitable without the rent, but there would be other losses that would need to be factored into a plan moving forward. That stated, these accounts are freshly filed and the prevailing fragility known to the auditors: but nevertheless they are confident of a viable plan without the club.

Of course, depending on a the nature of any CCFC less future, there could be an impact in sponsorship, but equally don't forget, LG spent £28m on an 8 year deal to sponsor the LG Arena in Birmingham. What's that? Over three times what we get from Ricoh? I'm not saying we'd get that much but simply showing that sponsorship isn't limited to football venues

 

[ashbyjan]

I mention it because BSB was stating it was over the £20k extra they would get from the Compass share of IEC profits and I was explaining that its not just that they want but also the profit Compass make providing the service to IEC - approx £200k.

 

[Mary_Mungo_Midge]

It would remain viable only in the sense that the city council would not call in the debt should ACL default on repayments to them. Had they still owed the money to Yorkshire Bank directly, then their viability post CCFC and Ricoh exit would not be so clear-cut.

The moment is does default, it becomes a facility that is subsidised by the taxpayer, whereas up until now if has been entirely self-sufficient.

Rid of a non paying tenant: what suggests ACL would default? That's scaremongering surely?

 

[theferret]

Rid of a non paying tenant: what suggests ACL would default? That's scaremongering surely?

Rid of a non-paying tenant that cannot be replaced? Not only that, rid of a non-paying irreplaceable tenant that is the source of a significant amount of indirect income?

Don't open up a school of business whatever you do.

I am not saying they will default, but it becomes likely. People should not underestimate the impact that losing the football club will have on the short-term finances.

Perhaps they will muddle through with the help of the public purse, and the council have engineered a situation where ACL have no mortgage commitments, just a debt to the city of Coventry. The truth is, the Ricoh Arena is not the LG. Open air events without the football club would be limited to 4 or 5 a year (they just aren't there, and only about 4 or 5 music acts do summer stadium tours anyway), and all they then have is an awkwardly shaped empty hall which doesn't really work well as a concert venue and is limited in the types of exhibitions it can stage. A big investment to adapt the venue would be required if it lost the football club on a permanent basis.

 

[Brighton Sky Blue]

I mention it because BSB was stating it was over the £20k extra they would get from the Compass share of IEC profits and I was explaining that its not just that they want but also the profit Compass make providing the service to IEC - approx £200k.

Didn't know that Jan, cheers

 

[duffer]

Rid of a non-paying tenant that cannot be replaced? Not only that, rid of a non-paying irreplaceable tenant that is the source of a significant amount of indirect income?

Don't open up a school of business whatever you do.

I am not saying they will default, but it becomes likely. People should not underestimate the impact that losing the football club will have on the short-term finances.

Perhaps they will muddle through with the help of the public purse, and the council have engineered a situation where ACL have no mortgage commitments, just a debt to the city of Coventry. The truth is, the Ricoh Arena is not the LG. Open air events without the football club would be limited to 4 or 5 a year (they just aren't there, and only about 4 or 5 music acts do summer stadium tours anyway), and all they then have is an awkwardly shaped empty hall which doesn't really work well as a concert venue and is limited in the types of exhibitions it can stage. A big investment to adapt the venue would be required if it lost the football club on a permanent basis.

Without the non-paying tenant there would be no need to retain the pitch, or the stands. In which case presumably ACL could do what they wish in terms of developing or selling bits of this area for office/retail/housing/hotels etc.

I don't think anyone wants that outcome, but there's no doubt that there's still money to be made that way, should it come to it. Perhaps a quicker and more certain return for the taxpayer too.

 

[grego_gee]

ACL are deluded if they think they can survive without the football club, certainly not with the current business model.

I have said this before, but I have heard from a source at Ricoh UK that they would withdraw from the naming rights deal if the football club leave or are forced out.

How ACL could survive with the loss of CCFC and Ricoh (not to mention Compass who would surely want to renegotiate their contract) is a mystery. Perhaps they have something up their sleeves, but I seriously doubt it.

Is it really the situation that ACL get income from the naming rights from RICOH that are directly dependant upon the team playing there? Is there a clause in their agreement that allows them to withdraw if the team no longer plays?.....
AND ACL get ALL the income.......???

imp:

 

[rupert_bear]

ACL are deluded if they think they can survive without the football club, certainly not with the current business model.

I have said this before, but I have heard from a source at Ricoh UK that they would withdraw from the naming rights deal if the football club leave or are forced out.

How ACL could survive with the loss of CCFC and Ricoh (not to mention Compass who would surely want to renegotiate their contract) is a mystery. Perhaps they have something up their sleeves, but I seriously doubt it.

Rugby Union, there are 2 top Union clubs struggling for a ground, Saracens are one, could this be an option ? Could happen anyway. Getting more and more popular and the Ricoh is a popular venue with the egg chasers

 

[theferret]

Without the non-paying tenant there would be no need to retain the pitch, or the stands. In which case presumably ACL could do what they wish in terms of developing or selling bits of this area for office/retail/housing/hotels etc.

I don't think anyone wants that outcome, but there's no doubt that there's still money to be made that way, should it come to it. Perhaps a quicker and more certain return for the taxpayer too.

It is feasible that could happen. Or, a major investor might want to take it on and adapt it so that it is more suited as a multi-purpose leisure/entertainment venue.

It's current business model does not work without a football club though, that is clear.

 

[grego_gee]

Rugby Union, there are 2 top Union clubs struggling for a ground, Saracens are one, could this be an option ? Could happen anyway. Getting more and more popular and the Ricoh is a popular venue with the egg chasers

WTF?
Are you trying to find an alternative tenant for ACL?
I thought this was a CCFC forum!!!

imp:

 

[theferret]

Is it really the situation that ACL get income from the naming rights from RICOH that are directly dependant upon the team playing there? Is there a clause in their agreement that allows them to withdraw if the team no longer plays?.....
AND ACL get ALL the income.......???

imp:

My understanding is that there are contractual clauses that allow for an exit. ACL wouldn't stop them anyway, no point getting into a legal fight they would almost certainly lose.

 

[Houdi]

Rugby Union, there are 2 top Union clubs struggling for a ground, Saracens are one, could this be an option ? Could happen anyway. Getting more and more popular and the Ricoh is a popular venue with the egg chasers

Not sure Coventry Rugby Club would be too happy with that prospect.Plus who would go and watch a 'foreign' rugby club suddenly turning up to the Ricoh,400/500??,can't see them being able to pay a £400,000 annual rent,on those attendance figures.

 

[rupert_bear]

WTF?
Are you trying to find an alternative tenant for ACL?
I thought this was a CCFC forum!!!

imp:

No but people are clinging to the fact that being a football stadium there is no real option other than CCFC, but there could be. Big money to be made in the top flights of Rugby Union. Could happen aswell as soccer.

 

[ashbyjan]

Understanding is
1. The naming rights deal was very much front loaded and whilst significant is not crucial to ACL survival.
2. Ricoh have no intention of pulling out as they are happy with the exposure their brand gets amongst their target market ie businesses that attend exhibitions, conferences etc, they like the fact that there is a plethora of road signs with their name on, not the usual football symbol, how much positive coverage have they received from association with a third tier football club? Got quite a lot of mentions everytime the dispute gets in the news, probably more mentions than directly because of the football!

 

[rupert_bear]

Not sure Coventry Rugby Club would be too happy with that prospect.Plus who would go and watch a 'foreign' rugby club suddenly turning up to the Ricoh,400/500??,can't see them being able to pay a £400,000 annual rent,on those attendance figures.

Would Cov object ? Been on the brink of going bust for years and binging a top flight club to Coventry could be a back door way into the Rugby Union big time for Coventry, which traditonally has been a rugger area for years. Rule nothing out !

 

[grego_gee]

you miss my point...
ACL get direct income (c10m) from CCFC being present in the Arena - its worthless without them.
Why doesn't it go directly to CCFC?... its just like the F&B.

It just demonstrates that ACL is a totally unnecessary entity.
What is the total for all the fat cats salaries and pension and redundancy rights and whatever in ACL? ......
it could all be saved if the Ricoh was owned & run by CCFC Holdings

It is the council that created them - they are responsible for them
THEY NEED TO GET RID OF THEM!

imp:

 

[Houdi]

No but people are clinging to the fact that being a football stadium there is no real option other than CCFC, but there could be. Big money to be made in the top flights of Rugby Union. Could happen aswell as soccer.

Blimey not only wanting the Council to close Coventry City Football Club down,you want them to destroy Coventry Rugby Club as well.Unless you seriously believe this City could support 2 Rugby clubs,particularly in the light that it can barely sustain 1 team presently.

 

[Diehard Si]

No but people are clinging to the fact that being a football stadium there is no real option other than CCFC, but there could be. Big money to be made in the top flights of Rugby Union. Could happen aswell as soccer.

I agreed with you until you said 'soccer'

 

[RoboCCFC90]

It was for the year ending May '12. Profits were circa £1.1m with the club plying £1.2m in rent. So it appears borderline profitable without the rent, but there would be other losses that would need to be factored into a plan moving forward. That stated, these accounts are freshly filed and the prevailing fragility known to the auditors: but nevertheless they are confident of a viable plan without the club.

Of course, depending on a the nature of any CCFC less future, there could be an impact in sponsorship, but equally don't forget, LG spent £28m on an 8 year deal to sponsor the LG Arena in Birmingham. What's that? Over three times what we get from Ricoh? I'm not saying we'd get that much but simply showing that sponsorship isn't limited to football venues

The reason ACL may feel are confident that a plan exists without the club are becuase of the less demanding and more fragile repayments back to CCC then perhaps Yorkshire Bank's loan agreement. Although I am sure that any future that involved CCFC would benefit ACL greatly.

Agreed there will be sponsorship always at the Arena, but I read a rumour somewhere that Ricoh UK Ltd would immeadiately pull out of sponsoring the Arena if CCFC were to leave as an example, but this is a pure rumour.

Yes the LG is a perfect example and unfortunately the LG will always attract a higher standard of events compared to the Ricoh if CCFC were to leave especially after the currently debacle as this Limelight cannot be good for ACL as well as CCFC, looking at past events the biggest names to grace both Arena's..

LG
Rhianna, Cheryl Cole, Spice Girls, Jay Z, Nicky Minaj, One Direction, etc. (Superstars)

Ricoh
Coldplay, Bruce Springstein, James Morrison

This would also have an affect on sponsoring while ACL can't attract to bring in huge names (I know everything isn't based on concerts, but it's an example I am using) the Arena would doom to fail, but if CCFC were to continue using the Arena and get promoted back to Championship and then in the future to the Preimer League, I would bet that bigger names attend the Arena for Concerts and Events.