Revenues - how much are they worth? (21 Viewers)
- Thread starter Grendel
- Start date
skyblueinBaku
Well-Known Member
I suppose the answer to that is "whatever someone is prepared to pay for them".
Grendel
Well-Known Member
I would say so.
sky blue john
Well-Known Member
My offer is a pound so does that mean I should get them over Sisu who have offered nothing ?
chiefdave
Well-Known Member
Its a complex situation. Do we want the revenues for FFP or the profit for the bottom line. If it's revenues how are we going to use that to our advantage when the amount to budget for FFP would be more than the profit, what will make up the shortfall.
Once you know what we want it's still not easy.
If they want everything at the Ricoh then I think Compass paid around 4m for a quarter of the JV company so on that basis to buy the whole lot back 16m. Of course to do a full valuation you would have to assess any changes to the fortunes of the JV since it was formed, ie: what impact has the club leaving had.
Even then it's not straightforward. Do you value it with or without the club. The argument can be made both ways.
Or do they just want what is generated on matchdays. You could value that differently, make an argument that the JV is not getting that money now so won't miss it. Again that's too simple as you have to factor in events ACL have to turn down due to the league requirements for the club to have first call on the stadium.
It's a complex situation and to me, if we're talking a short term Ricoh return as SISU claim it would be, it may be easy just to forget this side of things. The increase in revenue over Sixfields would be huge without taking this into account so why let the whole deal potentially fall down over a relatively small amount.
Once you know what we want it's still not easy.
If they want everything at the Ricoh then I think Compass paid around 4m for a quarter of the JV company so on that basis to buy the whole lot back 16m. Of course to do a full valuation you would have to assess any changes to the fortunes of the JV since it was formed, ie: what impact has the club leaving had.
Even then it's not straightforward. Do you value it with or without the club. The argument can be made both ways.
Or do they just want what is generated on matchdays. You could value that differently, make an argument that the JV is not getting that money now so won't miss it. Again that's too simple as you have to factor in events ACL have to turn down due to the league requirements for the club to have first call on the stadium.
It's a complex situation and to me, if we're talking a short term Ricoh return as SISU claim it would be, it may be easy just to forget this side of things. The increase in revenue over Sixfields would be huge without taking this into account so why let the whole deal potentially fall down over a relatively small amount.
chiefdave
Well-Known Member
Or whatever someone is prepared to sell them for. If Compass, who are less likely to have any feelings one way or the other to CCFC, feel the value in retaining the company is greater than what they are being offered and / or what they have already put in how do you persuade them to sell?
Grendel
Well-Known Member
The £16 million I assume is for 43 years of the remaining leads isn't it? Wasn't the actual sale of match day revenues for £6 million over 50 years?
chiefdave
Well-Known Member
Matchday revenues were initial given to the club as part of their share in ACL, when they sold that share to Higgs they of course had the option to buy that share back at a formula price but as we know that option disappeared thanks to the non payment of rent. I don't think the matchday revenues have ever been sold as a stand alone item have they?
This is the problem, there's so many different ways you can come at it to value their worth and the difference can be millions.
Grendel
Well-Known Member
No Dave it isn't a problem. Over 3 years they are with at the most around £150,000. Considering ACL have been received the clubs payment in addition to the payments from the two directors I don't think it's difficult to offer the club the match day revenues in the rental price. Then after 3 years they go back to ACL - frankly it's not difficult at all and they should just offer it.
chiefdave
Well-Known Member
The flip side of that is does it make good business sense to stay in Northampton and lose literally millions in other revenue streams over £150K? If the argument is that the revenues are worth next to nothing in the grand scheme of things then what difference does it make if the club get them or not.
As I've said before I'd love the club to have all revenues but the notation that we should be prepared to lose millions to try and gain access to a relatively small amount seem ludicrous to me.
chiefdave
Well-Known Member
That's their biggest mistake, apart from buying a football club. Imagine if on day 1 they had purchased half the stadium. At that point there was no JV, they would have had all matchday revenues and would have owned 50% of the company who would be dealing with any rent renegotiations.
How much has the decision not to spend somewhere in the region on £10m on day one cost them in the last few years?
Sky Blue Kid
Well-Known Member
I keep hearing that Greek guys name all the time....errr, erm....Oh that's it...Mr Popadopolous.
Grendel
Well-Known Member
So you are saying when we sold them we were ripped off and if a new buyer came in £86 million is reasonable for the lease period?
Seems extremely difficult to value to me, there is multiple numbers you could use the amount the revenue is producing now (nothing) the amount the revenue would produce per year if we were at the ricoh, the amount the revenue would produce per year if we were at the ricoh and get promoted to the championship (which seems likely), the amount the revenue would produce per year if we were at the ricoh and got back to the premiership (which seems unlikely in the next 5 years).
It also depends on what revenues they are asking to buy, what the current contracts are for those revenues and what companies who own those revenues believe they are worth.
It also depends on what revenues they are asking to buy, what the current contracts are for those revenues and what companies who own those revenues believe they are worth.
shmmeee
Well-Known Member
We didn't sell just them though. We sold 50% of ACL as well. Also I'd expect that earnings were significantly higher in the Championship.
I have literally no idea what you're on about in the rest of the post. Sorry.
jesus, thats an expensive lead.... i bet even the queens corgi's leads cost less, not matter how long they last
If the feasibility of ACL offering f&b revenues are a sticking point it still shouldn't block a deal imo. Even without any revenues the club are getting a state of art stadium, maintained, let's say for 200k p/year. How much does it take to upkeep an older ground eg fratton park?
I know its about ffp. Surely pitch side advertising and parking can be given to ccfc. I feel the club needs to be more imaginative in raising revenue. Why don't they negotiate with ACL as part of the agreement one day a year when they have use of the entire complex and run a CCFC festival? Paid entry. Local bands, meet the players etc etc. Local sponsorship etc. Its about engaging the community. Its surprising what people will put money into if they feel part of the club.
If f&b is still a problem open up some ccfc food stands outside the ground or even look to build a ccfc pub near the Ricoh!
I know its about ffp. Surely pitch side advertising and parking can be given to ccfc. I feel the club needs to be more imaginative in raising revenue. Why don't they negotiate with ACL as part of the agreement one day a year when they have use of the entire complex and run a CCFC festival? Paid entry. Local bands, meet the players etc etc. Local sponsorship etc. Its about engaging the community. Its surprising what people will put money into if they feel part of the club.
If f&b is still a problem open up some ccfc food stands outside the ground or even look to build a ccfc pub near the Ricoh!
Must be worth many millions. It is the reason we are at Sixfields isnt it? Or has the story changed again. Or worth lots and are essential when it suits Tim worth fuck all when he has to buy them. I must stop being so cynical
Grendel
Well-Known Member
For the club its worth £1.85 million in player budgets over 3 years. To ACL and compass its worth zero unless we play there.
chiefdave
Well-Known Member
I know the answer to this, Fratton Park is at the end of my road. Pompey are currently paying around half a million a season just to keep the ground open. Even spending that they are at reduced capacity as they can't afford to maintain some parts of the ground to pass health and safety.
Some people talk as if every other club has been given state of the art stadiums for free. Most clubs will either be repaying a mortgage or loan on a newer ground or paying out to maintain an older ground.
chiefdave
Well-Known Member
Where is that £1.85 million going to come from? Those revenues are going to generate that amount of profit so whats going to make up the shortfall. No point raising the amount you can spend under FFP if you don't actually have the money to spend.
Grendel
Well-Known Member
You said £2 million for 3 years was a starting point. Given the profit under ACL would be £300,000 over 3 years I would say you are not an accountant.
Grendel
Well-Known Member
Why isn't there any point? Would FFP allow that or not based on the average revenue a season from revenues from this source or not?
chiefdave
Well-Known Member
Spending money we didn't have is what got us in this mess in the first place. Don't see how doing the same thing is going to help us in the future.
Grendel
Well-Known Member
Can you name 1 other football in the league that doesn't have match day revenues?
I think under FFP in L1 only the profit of f/b is included. And then only 60% of the profit can be spent on players and wages.
Could be wrong though.
chiefdave
Well-Known Member
I have no clue what other clubs do but most other clubs haven't decimated their income streams in the way we have.
Anyway it's not that we don't get match day revenues is it, it's more we sold them off. Plenty of other clubs have done that I'm sure. Cardoza when interview about the ground share at the start of last season stated Northampton would get no additional revenues as they had sold those rights to a third party, in their case a local company.
If SISU were to take out a loan against next seasons season ticket sales so they can have the money now do you think they should also get the money from the season tickets when they sell them next year?
chiefdave
Well-Known Member
I'm not entirely sure what point you're trying to make here Grendel. I would love us to get all the revenues I just think the idea that we are entitled to them for free is a bit wide of the mark and I certainly wouldn't be in favour of spending what we don't have just because the FFP limit we have been set allows us to.
James Smith
Well-Known Member
It's more, whether the value that the buyer places on something and is prepared to pay for it is worth more to the seller than them hanging on to the goods.
Like putting a reserve on an item at an auction, you're prepared to sell it but if the price doesn't reach how much you value the item, it won't be sold.
Grendel
Well-Known Member
The point I am making is that we sold them off over a 50 year lease. To purchase them for 3 years is a fraction of the selling price. £50,000 a year is 50% of the profit generated by ACL at its peak for these revenues. Therefore they should easily be packaged in a short term deal for the clubs benefit.
chiefdave
Well-Known Member
But on that basis you are suggesting SISU pay a market rate to purchase them. From everything we have heard they don't want to do this, they expect them to be handed over for free whilst also paying what most would consider a low rent for the type of facility they are getting.
If SISU want to make a market value offer to purchase the revenues, or for that matter purchase the lease, they should get on and do it. That's always been an option open to them and one I don't they have to date taken.
James Smith
Well-Known Member
I don't know, not an expert in that area. I also don't know how many sold theirs on and haven't bought them back, again not an expert.