A few thoughts on recent statements (12 Viewers)
- Thread starter oldskyblue58
- Start date
italiahorse
Well-Known Member
skybluetony176
Well-Known Member
He surveyed himself and decided that this was the case. What other statistics do you need
oldskyblue58
CCFC Finance Director
In terms of the whole site then the RIcoh is not just a football stadium in fact the football stadium part is less than 50%. But that is just an aside more importantly ....
In terms of CCFC then there is even by renting (at a reasonable value) a scenario whereby CCFC could actually be profitable. If the cost structure currently set up ( £4m to £5m )is transferred to the Ricoh then assuming revenues increase to at least 2013 (£6.5m) levels that could see the club profitable (not seen that in decades). The trouble with that is expectation. If fans expect just because we are back at the Ricoh that they splash the cash then I think there is going to be an expectation gap. However SP has proven that you do not need in L1 to spend millions to be successful (well for half a season anyway) certainly it wouldn't take much spending to stabilise the club for a season in the top half and at least challenging. That could be done out of cash flow. Then build from there
The biggest thing to make the difference would be ticket sales - last time at Ricoh £3m with 11k crowds currently at Sixfields I would be surprised if it were over £600k in revenue could easily be much lower. A return to the Ricoh would create much interest from fans & media and a fair bit of income even if some still boycott because SISU still here. That resolve would be tested by a successful team on the pitch. But even without any F&B income the other incomes would increase (advertising, sponsorship, merchandise, TV money etc). So if cost structure is as indicated I think that would see the club break even or make a profit. Add to it the player wheeling and dealing that is required at all clubs then it is not such a bad picture
The biggest problem with the cost base now is the level of interest bearing debt. The borrowings are 45m+ and a sizeable chunk of it bears interest. It has to bear interest in order to satisfy the "investors". That cost could easily be over £1.5m+. Catch 22 really without the debt then club would probably at least breakeven, but without much of the debt the club might not even be here. I didn't say simply the debt because some of it was self inflicted by bad management and poor cost control and other parts of it clever accounting.... those things are no one else's fault but the owners.
The club back at the Ricoh is to me pretty much a no brainer even if they didn't get all the match day income eg F&B's - however I think they should get all match day income streams but need to negotiate a proper deal for it not simply demand this is the rent we get the incomes.
Then you then need to factor in the requirements and needs of the owner, investors and SISU which makes things somewhat less certain. I sense no real compromise and that's a worry. The only way that the investors get a return short or medium term is not by CCFC making a small annual profit even if that is after paying some interest. There has to be a capital growth or something similar to get the big returns the high risk strategy demands. That means ownership of the site or victory in court. For that reason at the moment I do not see the legals being dropped and that puts at risk any discussion of a return even though a return even short term could change so much for CCFC.
I can see it from both sides. SISU need a return on investment and need to stop the lending - ie the team pays for itself. Hedge funds, private equity funds are set up to get returns for their investors not to build a rapport with football fans - there is nothing wrong in that. ACL & CCC want CCFC back at the stadium not necessarily for purely financial reasons (but not at any cost to get it done) are not prepared to deal with club owners if they are constantly issueing court action against them - they do not want or need the expense and lost time and will look in different directions if they have to.
CCFC remains a tool in a plan for all this ....... and the fans remain undervalued and stuck in the middle
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chiefdave
Well-Known Member
I wonder how much the stadium costs when not in use. Can't imagine its a huge amount as things like security would be in place already for the rest of the site. Pitch maintenance is only needed if the stadium is being used, what else needs to be done, a quick clean up before it's used? It's probably not a huge cost on ACL. Look at somewhere like MK Bowl, that's only used a handful of times a year, and some years not at all, yet is still there and viable.
I have thought for a long time (although they will never admit it) that ACL don't really want a SISU owned CCFC back at the Ricoh. Yes long term they will want CCFC back, but only when SISU have left, and they are simply prepared to wait. They believe like most people there is no plan B, and that plan A (getting the Ricoh) is there only option.
It is why SISU are determined to continue legal threats, and why they hardly even mention the new stadium fable anymore. Once you take out the huge legal fees that will be needed to agree a new deal, how much net income will ACL actually make,particularly when you factor in the new risk involved in getting entangled with the litigious SISU again.
Unfortunately for us fans, it may mean a further period of misery, but unless SISU cave in, and that doesn't appear to be in their nature, I believe ACL are content to keep them at arms length,especially if the FL orders the full £590,000 to be paid. Just as some people clung to the notion that the JR would produce a smoking gun, they are now clinging to the vain hope that ACL will suddenly implode.
shmmeee
Well-Known Member
Agree with the last bit 100%. I'm not sure they have such an issue with working with Sisu full stop though, just that they don't trust them. PWKH worked with Waggott on the academy deal after a war of words, so there's precedent.
I don't think Sisu will return on any deal that doesn't allow them to continue distressing ACL though, and that might be a problem.
Rob S
Well-Known Member
Great stuff OSB. Really good to have some background & analysis.
One of the issues with discussing all of this is that people will simplify things (e.g. Compass rather than IEG) and that's where some of the confusion & received wisdom creeps in. The flip side of that is that all the TLA & FLAs confuse the hell out of a lot of people.
A couple of points...
How to work out a reasonable rent?
Looking at all of the recent machinations at Peterborough, we see they have renegotiated – after withholding rent! – to £300,000 which will be cut drastically during the renovations and then get back up to near the £0.5m mark. However, what does that get them? 365 day access? Control of all revenue generating possibilities? A pretty crappy stadium which might be a bit better after the Moys end improvements?
But then what is a L1 standard/average/benchmark? The Ricoh Arena, Deepdale, The Britannia, the Crisp Bowl, Elland Road, St Mary's, The Valley, Hillsborough, Bramall Lane, Liberty Stadium, Madejski Stadium, DW Stadium & Molineux have all hosted L1 games in recent years and are in the same tier but contrast that with some of the tumbledown crackhouses that lurk around the fixture list.
Ultimately, I'm with OSB & others who see negotiations as the way to sort out any issues and that the idea that this could get sorted out for the new season is pretty laughable.
I'm probably with the cynical wing here in thinking that neither side are to bothered about getting things done but am less cynical about the possibility of a new stadium. I might drop into Ladbrookes later to see what odds I can get & start up a betting thread for a bit of fun
One of the issues with discussing all of this is that people will simplify things (e.g. Compass rather than IEG) and that's where some of the confusion & received wisdom creeps in. The flip side of that is that all the TLA & FLAs confuse the hell out of a lot of people.
A couple of points...
How to work out a reasonable rent?
Looking at all of the recent machinations at Peterborough, we see they have renegotiated – after withholding rent! – to £300,000 which will be cut drastically during the renovations and then get back up to near the £0.5m mark. However, what does that get them? 365 day access? Control of all revenue generating possibilities? A pretty crappy stadium which might be a bit better after the Moys end improvements?
But then what is a L1 standard/average/benchmark? The Ricoh Arena, Deepdale, The Britannia, the Crisp Bowl, Elland Road, St Mary's, The Valley, Hillsborough, Bramall Lane, Liberty Stadium, Madejski Stadium, DW Stadium & Molineux have all hosted L1 games in recent years and are in the same tier but contrast that with some of the tumbledown crackhouses that lurk around the fixture list.
Ultimately, I'm with OSB & others who see negotiations as the way to sort out any issues and that the idea that this could get sorted out for the new season is pretty laughable.
I'm probably with the cynical wing here in thinking that neither side are to bothered about getting things done but am less cynical about the possibility of a new stadium. I might drop into Ladbrookes later to see what odds I can get & start up a betting thread for a bit of fun
Great stuff OSB. Really good to have some background & analysis.
One of the issues with discussing all of this is that people will simplify things (e.g. Compass rather than IEG) and that's where some of the confusion & received wisdom creeps in. The flip side of that is that all the TLA & FLAs confuse the hell out of a lot of people.
A couple of points...
How to work out a reasonable rent?
Looking at all of the recent machinations at Peterborough, we see they have renegotiated – after withholding rent! – to £300,000 which will be cut drastically during the renovations and then get back up to near the £0.5m mark. However, what does that get them? 365 day access? Control of all revenue generating possibilities? A pretty crappy stadium which might be a bit better after the Moys end improvements?
But then what is a L1 standard/average/benchmark? The Ricoh Arena, Deepdale, The Britannia, the Crisp Bowl, Elland Road, St Mary's, The Valley, Hillsborough, Bramall Lane, Liberty Stadium, Madejski Stadium, DW Stadium & Molineux have all hosted L1 games in recent years and are in the same tier but contrast that with some of the tumbledown crackhouses that lurk around the fixture list.
Ultimately, I'm with OSB & others who see negotiations as the way to sort out any issues and that the idea that this could get sorted out for the new season is pretty laughable.
I'm probably with the cynical wing here in thinking that neither side are to bothered about getting things done but am less cynical about the possibility of a new stadium. I might drop into Ladbrookes later to see what odds I can get & start up a betting thread for a bit of fun
No New Ground while they keep appealing Rob.
Rob S
Well-Known Member
Why not?
The Appeals are to deliver the RICOH,havn't you heard .
skybluetony176
Well-Known Member
skybluetony176
Well-Known Member
What version of CCFC? I think most would have packed there bags, left and found something else to do by, say, 2020.
There is currently no evidence that a new stadium will be built.
chiefdave
Well-Known Member
When they started down this road I remember posting that by now we should have seen them purchase land, full plans and a planning permission submission but that wouldn't mean the stadium was actually happening as that can all be done relatively quickly and easily and without chucking too much money down a hole. The fact that we're a year into a 3 year plan with zero sign of being any further forward than before we started can only mean either it's not going to happen or they are totally incompetent.
The question now is having repeatedly said they are building it and its the only viable way forward what do they do now they seemingly have failed to get the Ricoh on the cheap. They either have to go back to Ricoh or actually find a way to build a stadium, probably losing millions in the process.
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The questoin is irrelevant. I do not offer any odds, as it isn't going to happen. Deep down, do you think it will?
If another 12 months pass with no sign of land purchase or build ,the FL would be under immense pressure to relieve Sisu of the golden share?
If in 12 months time sisu agree to a 3 year or so deal back at the Ricoh ,the FL couldnt touch them .A good incentive to talk but very ,very slowly.
If in 12 months time sisu agree to a 3 year or so deal back at the Ricoh ,the FL couldnt touch them .A good incentive to talk but very ,very slowly.
I don't believe there is hardly any chance of sisu actually building a stadium in the coventry area, I think the chance of it happening is significantly less than 100/1 but I wouldn't be interested in getting involved in a bet like that because the rewards for being right are minute and the rewards for being wrong are very significant.
If someone said to me I bet you the lottery numbers this week are 4,6,14,16,22,31 if they are I'll take your house and all your possessions, if they aren't I'll give you £2. I wouldn't take them up on it* because even though the bet is smart in that if you repeat it enough times you come out in profit there is the risk of you losing everything and the benefit is very small. That's how I'd view betting with you, in order to win an amount of money that I cared about at all, I'd basically be having to risk 5k+ which would be nuts.
*I actually would take them up on it but I'd lay off the bet by buying a ticket myself.
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Rob S
Well-Known Member
I'm not saying that you have to take the bet but 'impossible odds' are still given. Deep down I think it will unless ACL & Sisu work out a deal or either (or even both!) go bust. There's always the possibility of a buyer coming in and offering enough to make Sisu sell but I think there's more likelihood of a new stadium.
I know someone who met Joy recently and said that in his mind the chance of a new stadium had gone from 20–30% to 60–70% or more and he's no Sisu fan by a long chalk.
EDIT: Sisu won't go bust.
Rob S
Well-Known Member
Looks like we will have to agree to disagree then re the stadium. JS and TF can say it will happen, the evidence at the moment suggests the contrary (it has nothing to do with whether I like Sisu or not). The outcome of the conversaion that your friend had with JS explains why this has been your topic of the day.
I agree - Sisu won't go bust, and I never thought they would do.
Anyway, mre important things to do now - off to hang my mums new net curtains.
oldskyblue58
CCFC Finance Director
wouldn't give you odds on the current incarnation of CCFC playing in 2020 to be fair let alone in a new stadium
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In this quote you comment that you are concerned that people are discounting a new stadium build . This is SISU's decision , if it happens it happens . Hey ho ,Coventry have a new stadium to do with what they will,but in my eyes Sisu wouldnt be as foolish . Another 20 to 30 million on top of what they already owe plus 10 to 20 mill to get you into the premiership (with an awful lot of luck)
I know hedge funds go for high risk ,high return but this smacks of high risk, low return
oldskyblue58
CCFC Finance Director
The rent. Not sure these ideas are acceptable but here goes.
The argument from TF is that the rent should be based on a benchmark figure of around 170k as I understand it. That is what he says is the average rent for an average L1 club ground. Ignore the premium that should apply for quality but say we accept that is right (never seen it proved so I really do not know). A measurement of an average ground is capacity (this seasons not any other season because we are on about current not past rents) The average ground in FL1 is 15706 seats. That would be for the use during matches because that is the main use at most grounds. That would equate to 170,000/15706 = 10.82 rent per seat per season or 47p per seat per game.
Additional games (cup etc ) could simply be at 47p per seat
Usage well that's left out of this but on average it is 49% for L1 clubs . Usage is largely dependent on what the club puts on the pitch for its customers and nothing to do with the stadium management or stadium owners.
what you could do is
1) have a usage cost of 47p per match per seat occupied. Match attendance is 10000 rent = 4700 Would favour the club but it is in clubs best interest to maximise attendance and it should be able to provide the correct figure that can be checked
or
2) say you rent the whole stadium so it is 32,602 x 47p x 23 = £352,427. Clearly higher than they want (or perhaps if ACL accepts £170k plus match day expenses indicates a discount on rent other teams do not get pro rata to capacity) Would favour ACL
or
3) close off parts of the ground to reduce capacity and say have 20000 x 47p x 23 = £216200 Perhaps an acceptable compromise?
47p as a percentage of a match ticket is not a lot - less than 4%
Sticking point is still the match day expenses and access to income.
Match expenses well any team has those so why would it be a problem other than how much. Define them agree a unit price or provide copies of invoices. do it on a one year or six monthly rolling basis for review. How hard should it be in a computer age to do a little number crunching. But they are not part of the rent
In terms of access to income well if the 47p per seat plus match day expenses paid then the match day income is CCFC's.
The next bit is where to source F&B's etc. Why not source it from ACL/IEC/Compass etc they are on site and there should be economies of scale. There is a deal to be done just need some open minds on both sides. To get that income the club has to pay direct costs to someone get a deal on price with IEC/ACL. Again it is in clubs interest to maximise turnover and margins but so long as ACL/IEC make some profit in the deal why would they not do it? So long as CCFC make a decent margin too why would they not do it
Advertising. I believe at Sixfields CCFC bring theirs in and out on match days. Why not do the same. Income and direct costs all CCFC's to deal with
Car parking- not sure what the average car park capacity is at the average L1 ground I doubt it is close to 2000. Well if not there could be a calculation to pay a reasonable premium for the spaces that relate to the above the £170k average rent stadium alluded to.
Just some ideas I am sure there should be others . It is not that it cant be done..........
The argument from TF is that the rent should be based on a benchmark figure of around 170k as I understand it. That is what he says is the average rent for an average L1 club ground. Ignore the premium that should apply for quality but say we accept that is right (never seen it proved so I really do not know). A measurement of an average ground is capacity (this seasons not any other season because we are on about current not past rents) The average ground in FL1 is 15706 seats. That would be for the use during matches because that is the main use at most grounds. That would equate to 170,000/15706 = 10.82 rent per seat per season or 47p per seat per game.
Additional games (cup etc ) could simply be at 47p per seat
Usage well that's left out of this but on average it is 49% for L1 clubs . Usage is largely dependent on what the club puts on the pitch for its customers and nothing to do with the stadium management or stadium owners.
what you could do is
1) have a usage cost of 47p per match per seat occupied. Match attendance is 10000 rent = 4700 Would favour the club but it is in clubs best interest to maximise attendance and it should be able to provide the correct figure that can be checked
or
2) say you rent the whole stadium so it is 32,602 x 47p x 23 = £352,427. Clearly higher than they want (or perhaps if ACL accepts £170k plus match day expenses indicates a discount on rent other teams do not get pro rata to capacity) Would favour ACL
or
3) close off parts of the ground to reduce capacity and say have 20000 x 47p x 23 = £216200 Perhaps an acceptable compromise?
47p as a percentage of a match ticket is not a lot - less than 4%
Sticking point is still the match day expenses and access to income.
Match expenses well any team has those so why would it be a problem other than how much. Define them agree a unit price or provide copies of invoices. do it on a one year or six monthly rolling basis for review. How hard should it be in a computer age to do a little number crunching. But they are not part of the rent
In terms of access to income well if the 47p per seat plus match day expenses paid then the match day income is CCFC's.
The next bit is where to source F&B's etc. Why not source it from ACL/IEC/Compass etc they are on site and there should be economies of scale. There is a deal to be done just need some open minds on both sides. To get that income the club has to pay direct costs to someone get a deal on price with IEC/ACL. Again it is in clubs interest to maximise turnover and margins but so long as ACL/IEC make some profit in the deal why would they not do it? So long as CCFC make a decent margin too why would they not do it
Advertising. I believe at Sixfields CCFC bring theirs in and out on match days. Why not do the same. Income and direct costs all CCFC's to deal with
Car parking- not sure what the average car park capacity is at the average L1 ground I doubt it is close to 2000. Well if not there could be a calculation to pay a reasonable premium for the spaces that relate to the above the £170k average rent stadium alluded to.
Just some ideas I am sure there should be others . It is not that it cant be done..........
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Rob S
Well-Known Member
From conversations I've had, £220k wouldn't be too far-fetched. Totally agree with your extended ellipses tho' ;-)
skybluetony176
Well-Known Member
I didn't think it was about the rent?
shmmeee
Well-Known Member
They've never been too far off each other on rent TBF, it seems to always come down to F&B.
I can understand ACL's reluctance to just give over their books. Seems to me they need to put pressure on Compass to agree to CCFC (for example) renting the kitchens and kiosks at a fixed price, maybe buying the stock as cost (though again, that brings up book access). As others have said, why wouldn't Compass agree as long as they make a profit?
I'd say something like £2-300k rent with full access to the concourses/kitchens/etc. should be workable. But long term it's always going to be more efficient for Compass/IEC to run the catering. Sisu have brought up AEG a lot, but AFAIK Compass own almost half of AEG's catering wing and do the catering for most of the AEG venues. But as long as the books are closed to Sisu, they'll always have questions about the efficiency of the business. And as long as Sisu are trying to distress them, ACL will always have issues with letting Sisu see the books.
I can understand ACL's reluctance to just give over their books. Seems to me they need to put pressure on Compass to agree to CCFC (for example) renting the kitchens and kiosks at a fixed price, maybe buying the stock as cost (though again, that brings up book access). As others have said, why wouldn't Compass agree as long as they make a profit?
I'd say something like £2-300k rent with full access to the concourses/kitchens/etc. should be workable. But long term it's always going to be more efficient for Compass/IEC to run the catering. Sisu have brought up AEG a lot, but AFAIK Compass own almost half of AEG's catering wing and do the catering for most of the AEG venues. But as long as the books are closed to Sisu, they'll always have questions about the efficiency of the business. And as long as Sisu are trying to distress them, ACL will always have issues with letting Sisu see the books.
Rob S
Well-Known Member
It can be done without that much outlay. This is the reason these people are million- & billionaires. They can make this sort of thing work. Trust me, I used to work in this area – well, the media part of the sector – and have seen some seemingly impossible projects come to fruition. This is small beer in comparison.
Rob S
Well-Known Member
BTW, I doubt you're much of a betting man but you do know that closing the book means that you are certain it will happen?
oldskyblue58
CCFC Finance Director
wouldn't open a book on it in the first place so wouldn't be closing one .................... but no I didn't and not at all what I meant and dead right I am not a betting man
Grendel
Well-Known Member
So on that basis we were grossly overcharged on the original deal weren't we?
skybluetony176
Well-Known Member
Not as grossly over charged on that basis at sixfields. Funny our owners don't see that as an issue.