The arena (4 Viewers)
- Thread starter gally9
- Start date
skybluesam66
Well-Known Member
ok - potentially we may still pay rent (depends on agreement) - but as we own half - we would get half of that back
+ 0.5m per year
Naming rights - coming up again in 4 years - my guess is that we would be able to increase on the £10m received from ricoh
+ 1.5m per year
other trading + 0.5m per year
so i would see at least an additional £2.5m per year coming in to the football club - while we are at the current level (or around the equivalent of about 8,000 season tickets)
+ 0.5m per year
Naming rights - coming up again in 4 years - my guess is that we would be able to increase on the £10m received from ricoh
+ 1.5m per year
other trading + 0.5m per year
so i would see at least an additional £2.5m per year coming in to the football club - while we are at the current level (or around the equivalent of about 8,000 season tickets)
If we owned half we wouldn't pay rent, and at the min I read somewhere (think telegraph) we pay about 2.5m per year and we only get back money from ticket sales and a percentage of profit from food/drink outlets on match day only.
Half of the top conference room is 7000 per day for businesses to rent. (Was told when enquiring about a wedding. There are several rooms, (5 plus the massive jaguar room where the signing was which can be partitioned off. They're always booked generating income, and not 2 mention the money generated from concerts. Loonacy not aquiring half, its better than paying to play there!!!
I know its a large outlay initially but longterm the club won't survive without it
Half of the top conference room is 7000 per day for businesses to rent. (Was told when enquiring about a wedding. There are several rooms, (5 plus the massive jaguar room where the signing was which can be partitioned off. They're always booked generating income, and not 2 mention the money generated from concerts. Loonacy not aquiring half, its better than paying to play there!!!
I know its a large outlay initially but longterm the club won't survive without it
oldskyblue58
CCFC Finance Director
sorry guys we wont see any money coming into the club because we own 50% of the shares. And it is the shares that are on offer not the 50% of the long leasehold. Shares give a right to dividends but ACL cannot pay dividends because the company has losses and to pay dividends would be illegal.
As for the rent I believe it is £1m - already having been discounted to that and I would think unlikely the council would sanction a lower rent. Buying 50% doesnt give us any more rights to reduced rent than we have now
Those income sources all belong to ACL which is a seperate company to the SBS&L group. Any distribution would need to be sanctioned by the council who have a mechanism for charging interest on their debt that increases as results improve for ACL.
Buying all of it would make the profits on the ACL operation available to the club - that purchase is going to be much more expensive and is subject to council veto
As for the rent I believe it is £1m - already having been discounted to that and I would think unlikely the council would sanction a lower rent. Buying 50% doesnt give us any more rights to reduced rent than we have now
Those income sources all belong to ACL which is a seperate company to the SBS&L group. Any distribution would need to be sanctioned by the council who have a mechanism for charging interest on their debt that increases as results improve for ACL.
Buying all of it would make the profits on the ACL operation available to the club - that purchase is going to be much more expensive and is subject to council veto
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I'mARealWizard
New Member
So, very briefly, what is the advantage of owning 50% of the shares if you can never receive a dividend?
oldskyblue58
CCFC Finance Director
it works if the intention is to buy the whole soon afterwards.......... it is a step to something else and at a cheaper fixed price for the 50% currently sought
skybluesam66
Well-Known Member
old sky blue - 50% of the shares - then depends on the company structure
50% of the shares - with a controlling interest (a golden share) - of the board, gives you the rights to consolidate the P&L of the business in which you have ownership into your own results
Therefore we would be able to consolidate in the revenue and profit of the business into our own
The only thing that Clouting gave away at the forum, was that if they did acquire the business, there would be some corporate restructuring, to ensure benefits were maximised to the club
In all cases, of course the council would have to agree to this
50% of the shares - with a controlling interest (a golden share) - of the board, gives you the rights to consolidate the P&L of the business in which you have ownership into your own results
Therefore we would be able to consolidate in the revenue and profit of the business into our own
The only thing that Clouting gave away at the forum, was that if they did acquire the business, there would be some corporate restructuring, to ensure benefits were maximised to the club
In all cases, of course the council would have to agree to this
We would not be shareholders, it is a 50% share of the ownership.
We can have an active roll in the day-to-day running of the company. The club and the ricoh arena ltd could be merged to save on overheads.
We would still have to pay rent but the match day car park, catering could be renegotiated.
Also the club could claim some rights to the stadium naming as having a football club at the stadium increases the amount this is worth, we get nothing at the moment.
Man City naming rights £400m. Manchester council (stadium owners) get £20m.
Ricoh Arena naming rights £1m per season. Coventry City £0.
As the arena company is directly related to the running of the business of the football club (it gains turnover from football matches) then it should be allowed in the new football league rules on wages / turnover. The club will wait until these rules are finalised before buying a share of the stadium as it will need to know what it can gain in turnover.
The major part of this is not the ownership of the stadium but the lack of income the club gets from the rent of the stadium.
Most clubs that rent stadiums, rent them for a set amount then get all income (parking,catering,concerts,non-matchday events).
Cov made the mistake of giving away all the income to just on play on the pitch and get the ticket money from 23 home games plus cup matches.
Would be interesting to know how much rent clubs like Man City, Hull, Lester etc pay. All clubs that do not own their stadiums and still managed to had a takeover.
oldskyblue58
CCFC Finance Director
But as far as we know there is no golden share and Clouting also said that the council can veto any deal. Think they would give control of ACL to SISU or CCFC ?
The results would already be reflected to some degree in the SB S & L accounts because ACL would be associated company even with 50% of the shares. The council are not going to agree to control of ACL being given to the club without being recompensed for doing so and certainly wont do that if they continue to see the black hole in the accounts of CCFC that money disappears into. They wont want to be party to funding the clubs losses.
oldskyblue58
CCFC Finance Director
crowsnest - the option that is on offer is to purchase the interest The Higgs Trust has in ACL. That interest is the B shares in ACL which owns the long lease and represents 50% of the issued share capital.
There are other ways to do it but the premise has always been that the club buys the Higgs Trust interest. ACL owns the long lease on the stadium (not Higgs Trust or Council but they control that ownership) and the council own the freehold.
Think you make good points about naming rights though
There are other ways to do it but the premise has always been that the club buys the Higgs Trust interest. ACL owns the long lease on the stadium (not Higgs Trust or Council but they control that ownership) and the council own the freehold.
Think you make good points about naming rights though
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oldskyblue58
CCFC Finance Director
no problems gally9.
The shares issued in ACL are divided equally in to 2 sets A shares and B shares. The council own the A shares and Higgs trust the B shares. I think both have the same rights so think it was done to reflect a joint venture between the two organisations
The shares issued in ACL are divided equally in to 2 sets A shares and B shares. The council own the A shares and Higgs trust the B shares. I think both have the same rights so think it was done to reflect a joint venture between the two organisations
rob9872
Well-Known Member
OSB, help me if you can please sir! The thing that baffles me (sorry for being slow) is that I read ACL (as in your post above) to understand a separate entity from Higgs and the council but I understood ACL to be Higgs and the council. Please can you clarify or have I miised the point entirely?
Usually A and B shares have different voting rights. It is very likely B shares holds less or even no voting rights, but in rare cases it is the other way around.
oldskyblue58
CCFC Finance Director
Legally any company is a seperate legal entity. technically its called the "veil of incorporation"
ACL is therefore a legal entity in its own right, any contracts it enters into are legally ACL's, any assets it has belong to the company any liabilities are the companys to pay.
ACL is however owned by the issue of shares to the council and higgs trust. That doesnt mean they own the lease to the ground, it does mean they control the company. The shareholders limit their liability on setting up the company to the amount due for the shares. So that if it goes bust no one can chase the shareholders for more money if those shares are fully paid for. If the company fails then the shareholders can lose their money as they are the last to be paid out in any liquidation. If the company succeeds then they can profit on any sale knowing they do not need to contribute more on the shares
If for example the long Lease was sold the funds would be paid to ACL, which would then close down, the various debts would be cleared and any sum remaining from liquidation of assets paid to the shareholders. (ie the shareholders do not have the rights to the sale proceeds of the lease only the right to what was left in the pot from sale of all assets less payment of all debts)
hope that helps rob
ACL is therefore a legal entity in its own right, any contracts it enters into are legally ACL's, any assets it has belong to the company any liabilities are the companys to pay.
ACL is however owned by the issue of shares to the council and higgs trust. That doesnt mean they own the lease to the ground, it does mean they control the company. The shareholders limit their liability on setting up the company to the amount due for the shares. So that if it goes bust no one can chase the shareholders for more money if those shares are fully paid for. If the company fails then the shareholders can lose their money as they are the last to be paid out in any liquidation. If the company succeeds then they can profit on any sale knowing they do not need to contribute more on the shares
If for example the long Lease was sold the funds would be paid to ACL, which would then close down, the various debts would be cleared and any sum remaining from liquidation of assets paid to the shareholders. (ie the shareholders do not have the rights to the sale proceeds of the lease only the right to what was left in the pot from sale of all assets less payment of all debts)
hope that helps rob
oldskyblue58
CCFC Finance Director
have checked the ACL accounts Godiva they appear to have the same rights, there is a specific note about it
BTW - there should be a difference, otherwise it makes no sense. Maybe different shareholder agreements?
les_miserables
New Member
Regardless of anything, lf a takeover happens the team must take prority, yes we need to buy back that 50% share and hopefully the other 50% too one day BUT the team is THE most important. I have followed the City fo 50 years and even in the Hill/Robins days we built stands or transformed our ground to an all seater and neglected the team. Even in our 1967 promotion season no players were bought that close season yet £100,000 was spent on a new West Stand.
Players win football matches not grandstands
Players win football matches not grandstands
oldskyblue58
CCFC Finance Director
that said les _miserables the long term future of the club depends very much on obtaining greater income streams from stadium ownership
coundonskyblue
New Member
I'm sure I've heard the council owns a golden share, i.e someone cant buy the ground to change its purpose.
cloughie
Well-Known Member
The possible difference in the voting could be that the council can veto the sale of the AH shares and so giving the council a say over who AH.sell to.
oldskyblue58
CCFC Finance Director
could be cloughie but it is quite normal in a private (not quoted) company for the remaining shareholders to approve any new shareholders coming in.
ACL own the long lease on the ground Paxman it is shown in their accounts together with the fact that the ACL bank loans are secured on all assets of ACL (would include the long lease). To sell the lease or 50% of it would create problems with the bank security given and the bank could object to the transaction if they didnt get their market value (31/05/10 owed £16m to Yorkshire Bank) From all reports it isnt ACL selling 50% to CCFC it is Higgs Trust that to me implies that the trust are selling their shares because they dont actually own 50% of the lease. Might be some clever scheme but dont have any details on it so can only tell you what I know but any scheme would involve the council and bank tegether with the trust.
ACL own the long lease on the ground Paxman it is shown in their accounts together with the fact that the ACL bank loans are secured on all assets of ACL (would include the long lease). To sell the lease or 50% of it would create problems with the bank security given and the bank could object to the transaction if they didnt get their market value (31/05/10 owed £16m to Yorkshire Bank) From all reports it isnt ACL selling 50% to CCFC it is Higgs Trust that to me implies that the trust are selling their shares because they dont actually own 50% of the lease. Might be some clever scheme but dont have any details on it so can only tell you what I know but any scheme would involve the council and bank tegether with the trust.
SkyBlue_Bear83
Well-Known Member
As I see it purchasing 100% of the stadium is vital in the long term for CCFC. The council will never sell it to SISU so as a club we can't move forward until SISU leave.
oldskyblue58
CCFC Finance Director
Dont think the council said they would never sell to SISU what they said is they wouldnt sell to the Club until such time as the owners who ever they are could prove that the books were in order and that they had a viable, sustainable and profitable business.
That applies to any owner of CCFC but would agree it seems very remote that it could be under SISU's ownership
That applies to any owner of CCFC but would agree it seems very remote that it could be under SISU's ownership
That surely depends on how long SISU owns us and how successfull they are getting the books balanced?
oldskyblue58
CCFC Finance Director
Yes Godiva - dont think it is a closed door but perhaps some doors are more open than others. Many things are possible including SISU staying and owning the stadium, my own opinion is that is unlikely
Johnnythespider
Well-Known Member
Blimey this is a weighty thread, my qeustion is a little more lighthearted. If we have a half share in the arena does that mean we can sack those muppets in orange.? Seems to me that would be worth a few million.
Would just like to say how much I appreciate the way olderskyblue breaks all this bullshit down and gets to the heart of the matter. Thankyou sir!!!
Another point that occurs to me is that if we ever manage to purchase half or all of the stadium, no doubt we would require a loan of some sort to do it. With that in mind any loan/ mortgage will require servicing. The 64 thousand Dollar question now is would we generate enough income to service such a loan/mortgage? I understand that in purchaseing part or all of the stadium we would tap into other revenue streams, but would they be enough to cover the cost of the loan? Over to you olderskyblue!!
Another point that occurs to me is that if we ever manage to purchase half or all of the stadium, no doubt we would require a loan of some sort to do it. With that in mind any loan/ mortgage will require servicing. The 64 thousand Dollar question now is would we generate enough income to service such a loan/mortgage? I understand that in purchaseing part or all of the stadium we would tap into other revenue streams, but would they be enough to cover the cost of the loan? Over to you olderskyblue!!