A Reasonable Proposal? (13 Viewers)

[RoboCCFC90]

I would be surprised if the Stadia side of the Arena was valued at anymore than £15,000,000 personally.

 

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[Astute]

I answered the question you originally asked.

Highfield Road cost less to buy complete than it cost to build.

Equally, the cost of building the Ricoh or otherwise is totally irrelevant to its value... now.

Its value is its value, and any emotive talk of being built by taxpayers, charities, etc. is totally irrelevant to a 'fair' value, which is whatever it is.

Fully agree with all of this, but there is also a value in the leasehold. Would they be looking at a value of the freehold with the leasehold still standing or would they also want to buy out the leasehold? The freehold wouldn't help our club much with the current leasehold in place. For the next 40 years or so the most valuable part of the Ricoh is the leasehold.

 

[Skybluesquirrel]

I answered the question you originally asked.

Highfield Road cost less to buy complete than it cost to build.

Equally, the cost of building the Ricoh or otherwise is totally irrelevant to its value... now.

Its value is its value, and any emotive talk of being built by taxpayers, charities, etc. is totally irrelevant to a 'fair' value, which is whatever it is.

What's emotive about using information contained in a council released report now in the public domain?

Had a private company constructed the stadium there would be very little information available for scrutiny.

 

[DazzleTommyDazzle]

I would be surprised if the Stadia side of the Arena was valued at anymore than £15,000,000 personally.

Odd then that SISU seem keen on building a stadium for £25m that would be less than half the size.

 

[RoboCCFC90]

Odd then that SISU seem keen on building a stadium for £25m that would be less than half the size.

What about our situation isn't odd?

 

[oldskyblue58]

Council cant actually offer either.

ACL holds the lease so they would have to offer any rent

ACL own the lease over all of the site so without ACL's agreement and compensation the Council cant split the site.

Even if you could split the bowl from the rest how would you split the areas that are used by both the bowl and the rest of the facility?

Lease still has at least 40 years to run. The council would have to buy back part or all of the lease before they could do it.

 

[duffer]

I know I keep banging on about this, but what if the highest value for the Ricoh isn't with it as a football ground?

The only way to get a true value for the site and the business is to offer it to the market, surely. Otherwise both sides will simply play a game, one massively undervaluing it, the other going the other way.

The other thing is, why should the Council be obliged to sell it right now, if they feel it's better for the taxpayer to hang onto the business for a while, either on the basis it can make money without the club, or that the club might be more amenable to negotiation after suffering a year of losses at Northampton?

SISU took the club away from the Ricoh, and much as I'd like to see it back the last thing I want is to rush into anything that doesn't give the taxpayer (and yes, the Charity) the proper return on their investment.

 

[oldskyblue58]

you can have all the emotional need you can handle to want the sale of the stadium by the council, but unless there is a sound business case (devoid from hype, politics, emotion, the needs of others) then it wont happen

So perhaps the question should be looking at it from the councils point of view (ie not as a fan nor as an owner of CCFC) what is the business case for CCC and/or ACL to sell to anyone?

 

[RoboCCFC90]

you can have all the emotional need you can handle to want the sale of the stadium by the council, but unless there is a sound business case (devoid from hype, politics, emotion, the needs of others) then it wont happen

So perhaps the question should be looking at it from the councils point of view (ie not as a fan nor as an owner of CCFC) what is the business case for CCC and/or ACL to sell to anyone?

It's going to come down to whether the council finds the business of being financially viable if not then why not put in on the market?

 

[Deleted member 5849]

So perhaps the question should be looking at it from the councils point of view (ie not as a fan nor as an owner of CCFC) what is the business case for CCC and/or ACL to sell to anyone?

Surely as it's the council however there are other considerations beyond the purely financial too? i.e. these considerations are why they've set up an ideological position of no to SISU, but maybe to somebody else. But notwithstanding that there are also the social and cultural benefits of having a football club linked to the city.

Notwithstanding that, there are the intangible benefits of identity.

Even if/when the JR is nonsense, it's never been on a purely business footing after all, has it, as otherwise the council wouldn't have taken over the loan for ACL. As freeholder, after all, it doesn't matter to *them* as such if ACL go bust, they still own the bricks and mortar, they can still do a deal with ACL's purchaser/lease to a 'new' ACL.

Even the football club isn't purely business after all, as if so it would have died a death long ago, before SISU even appeared. And if the criticism of SISU is that they're all finance ahead of the social, if it's purely economics from the other 'side' too they may as well slug it out to their deaths.

 

[SkyblueBazza]

Curious from some of the conversations I've had on here today, what the wider viewpoint is to a couple of "middle ground" proposals would be.

I too, don't want to see the council give over tens of millions of property to enable Joy to get a return on her investment. I also think pressure should be applied to both sides for a resolution. Finally I think pressure groups/campaigns are pointless without a tangible outcome that's being requested.

So I have two proposals that I feel are not weighted towards either side, but are aimed at the shared goal of getting CCFC playing in Cov again (preferably at The Ricoh).

Here are the proposals and I'd like to know which you'd back as a campaign:

1) The Council to offer/Sisu to accept the £150k rent agreement, for at least the next 3-5 years while our future is sorted out.

2) The Council to split the football section of the Ricoh off, get it independently valued and offer it to Sisu. Sisu to abide by the valuation (or an average of several if independence is in question).

Edit: woohoo the poll worked!

Option 1. SISU have moved on & have pretty much said it's all or nothing as far as the RICOH is concerned

Option 2. The football side (if they could & decided to sell that part of it)...would not be acceptable to SISU given their stance as above. Even if SISU changed their mind & said yes to what is effectively buying a franchise to operate the football from the RICOH (remember how seemingly everyone hates the franchise football idea?) how they would manage a deal with the other parties, such as Compass, is beyond my imagination. SISU want the revenue streams...but so do the like of Compass.
Also, why would ACL need football if they pull some major Rugby or whatever franchise into the mix, or manage to draw-in 1 or even 2 major stadium gigs/week from early through to late summer instead?

There's a lot in the mix here...the RICOH holds many opportunities beyond just football. THAT is why SISU want the ruddy thing!!! Football actually restricts other opportunities in early & late summer especially. I'm thinking major boxing bouts, super-groups doing a 3-4 night sell out stints. That kind of thing at £60ea can make our measly 10-15k a week attendances at an average £30ea (unless we make the promised land again soon) look somewhat less desirable.
So whilst this might seem conspiratorial...in SISU's grand plan, CCFC is a bit of a side-show for the riches that could be gained. Even now we can guess ACL are working hard in these areas, whereas football got in the way a bit before.

 

[oldskyblue58]

Yes it does matter if it is viable because they invested in shares in the thing if it goes bust they lose several million.

If its for sale its for sale ..... that includes to SISU. There are of course social etc reasons but councillors can get sued for the losses if the business case doesnt stack up.

The freehold is the Councils. The income however is in ACL. ACL is not just the councils and it is the directors of ACL that agree a sale of that company and have to make the recommendation of sale to the shareholders. Those ACL directors have to act in the best interests of ACL not the council. If it was 100% owned by the council possibly not a problem but it isnt. People miss the distinction between the various roles of those involved especially when some parties have to wear different hats depending on where they are at the time

Puzzles me why people think that a company should not take advantage of a cheap loan if they can get it preferring them to go pay higher rates at the high street bank etc. Whilst accepting its ok to be saying a company pays discount tax rates by changing its registered office :thinking about:

I assume that there is some kind of oversight committee at the council that means councillors can say visit the stadium and check on its financial performance......... would be interesting to know if they feel ACL is being run commercially, how busy it is etc

No it isnt a simple situation ...... yes there are other factors........ the worry right now is that ACL might prosper without CCFC and bring in business/money/sales from outside the area, stimulate finance and jobs 365 days a year (not just 25 days and largely circulating a Coventry pot of income). The figures have to stack up in some way, perhaps that is valuing of the social circumstances etc but is the answer guaranteed as CCFC must own the stadium? If it is and a) the stadium is made available b) the buyers match the Council/ACL valuation or expectation then I have no problem in it being sold no matter who the owner might be

 

[Deleted member 5849]

Puzzles me why people think that a company should not take advantage of a cheap loan if they can get it preferring them to go pay higher rates at the high street bank etc.

Well I certainly didn't say that wasn't a perfectly sane decision from ACL's POV.

The very fact it was on offer at all however isn't a purely commercial decision, based solely on financials however, just as Coombe Abbey isn't a solely commercial decision.

And that's where I'd be looking at movement that allows a deal between the two, where the intangible benefits SISU bring in terms of a football club bridge the gap between SISU's desired purchase price, and what price allows it politically acceptable for the council to sell its stake(s).

 

[oldskyblue58]

No business decision is based solely on the known financials is it? There are usually other factors.

There is at the moment few links to the stadium for SISU, they would be the fans and a lease that is about to end when CCFC Ltd is liquidate wouldnt they ? If you were hard nosed about it you could simply say right lets go get other business in. Fans wouldnt like it but it is possible (i cant say how possible) for the financial benefit to be greater to the city than having the present club at L1(leaving aside emotions etc)

What used to happen was that matches brought in some income from opposing fans and those city fans from outside the area plus recycled the pot of income that existed within Coventry. Many of the visitors arriving and leaving within an hour of kick off and final whistle - most not seeing the rest of the city - 25 days of the year

Where ACL are heading presently is putting on events, conferences etc that draw most of its money from well outside of Coventry, perhaps encouraging people to stay in the area, that encourages a few Coventrians to visit the events. The money in the coventry area recycled to other things. That adds to the local economy doesnt it? 365 days a year

Now I grant you if we were premiership then things could be very different but we are not and like clubs like Charlton we could be in L1 a long time.

Right now the decision has to be made by the parties involved on what they know. If there is substantial business in the pipeline away from CCFC for ACL it means some tricky decisions to be made by ACL directors and CCC

not saying any of this is how it will go but people tend to wear blinkers when looking at the situation ...... Things might not be how we want or how SISU need it to be........

 

[covcity4life]

i selected both, i want us back home, but ideally it would be to sell ricoh and rid ccfc of the council.

 

[Deleted member 5849]

There is at the moment few links to the stadium for SISU, they would be the fans and a lease that is about to end when CCFC Ltd is liquidate wouldnt they ? If you were hard nosed about it you could simply say right lets go get other business in. Fans wouldnt like it but it is possible (i cant say how possible) for the financial benefit to be greater to the city than having the club (leaving aside emotions etc)

You would indeed but then, reduce it to a business dispute and how can fans who have an emotional tie even begin to take 'sides'? If it's purely financial, and nothing but financial, then the language used by certain parties about it being a community asset goes out the window, and if it's purely financial than SISU may as well (continue to) press to obtain it as cheaply as humanly possible... and more to the point do whatever they feel like with it, once they own it.

 

[fernandopartridge]

You would indeed but then, reduce it to a business dispute and how can fans who have an emotional tie even begin to take 'sides'? If it's purely financial, and nothing but financial, then the language used by certain parties about it being a community asset goes out the window, and if it's purely financial than SISU may as well (continue to) press to obtain it as cheaply as humanly possible... and more to the point do whatever they feel like with it, once they own it.

You know that SISU making decisions in their own financial interest isn't allowed, but ACL or the Council doing something similar is.

 

[oldskyblue58]

This is purely financial to SISU..... they might dress it up as something else but it isnt what they do ..... finance, hard nosed finance is. I actually have no problem with that it is what I expect from them I wouldnt criticise any one for trying to get the best price but equally i wouldnt criticise a party holding out for more or saying there is no sale. The stadium purchase after all is important to SISU not CCFC ..... the income steams are important to CCFc and you dont need as established many times to own the freehold to do that, indeed the freehold currently couldnt get that in any case. The language on both sides we know not to be strictly accurate dont we.

If SISU owned it of course they could do what they like....... as it is they dont and the present owners have exactly the same rights to choose the best option for them. The worry is it that choice does not coincide with how many perceive the best current option for CCFC.

There is at times an almost hysterical cry of CCC must sell to SISU........... why must they, if it is not the best option for CCC?

 

[Deleted member 5849]

the present owners have exactly the same rights to choose the best option for them. The worry is it that choice does not coincide with how many perceive the best current option for CCFC.

Which is exactly why ACL should not exist!

 

[oldskyblue58]

If SISU got the Ricoh site do you think they would manage it or bring in a management company to do it?

There are many that perceive the best option as CCFC owning the stadium ....... a) is it and b) would they?

We have what we have......... there should be a reasonable compromise, a business deal to suit both sides....... that doesnt necessarily mean SISU owning the site but it shouldnt exclude it. However both sides have equal right to get the best deal for them....... that doesnt mean that CCC have or must sell to anyone though...... that is just business isnt it? Seems to be plenty of people saying it should be more commercial, more business like .... maybe we should be careful what we wish for..........

 

[Deleted member 5849]

I don't think SISU should exist as owners of the club either, btw.

However, with two businesses both empowered (and indeed often with little option) not to act in the club's interests, I find it very hard to take sides one over the other in a business dispute.

As mentioned, the nonsense of a football club being expected to branch out into property development is one reason among many the current setup is fatally flawed. in that respect shmeee's question is a good one, separating off the actual ground itself might be messy, might be seemingly impractical, but it does allow the football club to remember what it is, and that's a club rather than business. Call me old fashioned but as a fan of the football club I'd like its stadium to be central to the business of football, and its owners to be central to the business of football.

While they're not, then as long as either are willed to act in their own interests I can appreciate and understand why they would, from a financial sense, expect them to do nothing else...

But sneer in their general direction.

 

[robbiethemole]

Surely the most important thing here, I think we keep missing completely, is the Joy has stated she won't BUY the Ricoh!!!!!! She won't negotiate a price and wants it for free, it's only people on here who assume SISU will purchase the Arena.These are not normal business people who abide by contacts and laws, wake up and realise they can't be trusted

 

[Nick]

Surely the most important thing here, I think we keep missing completely, is the Joy has stated she won't BUY the Ricoh!!!!!! She won't negotiate a price and wants it for free, it's only people on here who assume SISU will purchase the Arena.These are not normal business people who abide by contacts and laws, wake up and realise they can't be trusted

When or where has she said she wants it for free?

 

[DazzleTommyDazzle]

You know that SISU making decisions in their own financial interest isn't allowed, but ACL or the Council doing something similar is.

Or vice versa, depending on who the poster is.

 

[Astute]

i selected both, i want us back home, but ideally it would be to sell ricoh and rid ccfc of the council.

You are a bit slow. SISU have already got rid of CCFC from the council.......and Coventry.

 

[Tonylinc]

When or where has she said she wants it for free?

I am also unable to find a quote BUT she has said (through our big mate Tim) that they would only return with the keys and as far as I understand no monetary offer has been made. Make of that what you will.

 

[Cheshire Sky Blue]

I know I keep banging on about this, but what if the highest value for the Ricoh isn't with it as a football ground?

The only way to get a true value for the site and the business is to offer it to the market, surely. Otherwise both sides will simply play a game, one massively undervaluing it, the other going the other way.

The other thing is, why should the Council be obliged to sell it right now, if they feel it's better for the taxpayer to hang onto the business for a while, either on the basis it can make money without the club, or that the club might be more amenable to negotiation after suffering a year of losses at Northampton?

SISU took the club away from the Ricoh, and much as I'd like to see it back the last thing I want is to rush into anything that doesn't give the taxpayer (and yes, the Charity) the proper return on their investment.

Duffer, the open market is one thing, but cost of creating a new stadium is a critical feature here. If SISU plan to spend £25 million on a new stadium, they would be better placed to offer the same for the RICOH. Other than they will never get the freehold, it makes simple economic sense. They could be in by Christmas. However, I do not think that either the council or ACL value the RICOH at such a low level.

 

[SkyblueBazza]

This is purely financial to SISU..... they might dress it up as something else but it isnt what they do ..... finance, hard nosed finance is. I actually have no problem with that it is what I expect from them I wouldnt criticise any one for trying to get the best price but equally i wouldnt criticise a party holding out for more or saying there is no sale. The stadium purchase after all is important to SISU not CCFC ..... the income steams are important to CCFc and you dont need as established many times to own the freehold to do that, indeed the freehold currently couldnt get that in any case. The language on both sides we know not to be strictly accurate dont we.

If SISU owned it of course they could do what they like....... as it is they dont and the present owners have exactly the same rights to choose the best option for them. The worry is it that choice does not coincide with how many perceive the best current option for CCFC.

There is at times an almost hysterical cry of CCC must sell to SISU........... why must they, if it is not the best option for CCC?

I reckon that just about nails it.

All party's want specific outcomes. Some are prepared to compromise in negotiation, some try unpalatable tactics, some are ignored - all familiar just like in any dispute in many walks of life.
We are the ignored, to the modern business structure with our owners & those that run the RICOH & the football authorities! Customer is king (if you believe what they tell you)...but money is GOD!

 

[shmmeee]

Council cant actually offer either.

ACL holds the lease so they would have to offer any rent

ACL own the lease over all of the site so without ACL's agreement and compensation the Council cant split the site.

Even if you could split the bowl from the rest how would you split the areas that are used by both the bowl and the rest of the facility?

Lease still has at least 40 years to run. The council would have to buy back part or all of the lease before they could do it.

I misspoke, you're absolutely right option one would require pressure on ACL not CCC (I'm usually the first to make such a distinction!)

The point about existing contracts is an interesting one and one Id assume would apply however much of the Ricoh Sisu owned, no?

I don't think the actual split is too hard otherwise, agreements similar to communal areas in posh flats could be drawn up for shared spaces.

Personally Id like to see the club buy back their half of ACL and the revenue that comes with it along with a sensible sliding scale rent dependant on league rather than attendances. However the thread is about finding a common ground a majority of fans could get behind, hence the 3 year idea.

 

[Brighton Sky Blue]

Or SISU could buy ACL's share of IEC and agree a nominal rent-that way they get access to the money the Ricoh makes without responsibility for development projects. It would be a great deal cheaper...

 

[stupot07]

Or SISU could buy ACL's share of IEC and agree a nominal rent-that way they get access to the money the Ricoh makes without responsibility for development projects. It would be a great deal cheaper...

We have no idea about IEC's finances other than they make a paltry 10% profit on F&BS...

 

[Brighton Sky Blue]

We have no idea about IEC's finances other than they make a paltry 10% profit on F&BS...

Profit is irrelevant for FFP and they apply to all events held at the stadium.