Details of Wasps' Ricoh Arena deal with council revealed (10 Viewers)

[The Gentleman]

Back to Sixfields
Everybody happy

No Wingy, we'll have our shiny new stadium by then................................................................................

 

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[CCFCSteve]

For me the two over riding conclusions are A, The council look like they have acted in the best interest of getting the loan repaid in half the time while still earning the same amount for the public purse and B, I wish our owners had the same forethought as the owners of Wasps to do the deal in the first place. Plain fact from the councils point of view is that they probably thought they had no chance of doing a deal with Sisu because of their actions and conduct. I would like to see where Les Reid will find the new smoking gun now or will hell freeze over first? PUSB

I agree 100%. I'm not happy with the council doing a deal with Wasps (and just hope it includes first refusal clause if Wasps decide to sell up), however, if SISU had acted professionally and had an amicable relationship with ACL rather than using aggressive, some would say bullying, tactics, then maybe they'd be the owners of a long leasehold. Rather than just owners of a struggling football club at the bottom of League One, with limited saleable assets. Nice move !

 

[torchomatic]

A bit of "banter" between Wasps and Leicester.

 

[Rusty Trombone]

Straight question: What happens to the loan if Wasps subsequently goes bust?

The council said that they wouldn't risk taxpayers' money by making loans to loss making operations, but as it turns out they did in both the original deal to ACL, and seemingly now again in this refinancing.

Maybe the reason Wasps have taken this loan on from the council is that they cannot obtain third-party finance to the tune of £14.4m given what a poor risk their business represents. It's a bit early to claim this is a good deal for the council, I'd say, especially if they're going to be on the hook if Wasps go bust.

The last accounts for ACL state that 'the loan is secured by a debenture creating a fixed and floating charge over the assets of the group, and a first legal charge over the lease.'

The Council are presumably content that the security given by ACL is enough to cover the loan balance, and presumably the Auditors were as well.

 

[wingy]

Indeed. We don't know how Wasps raised the other £5m to purchase the lease or how they turn around £3m losses. Neither do we know how they repay loans from Richardson.

Do we foresee another rent strike in the event that the rent is increased?

Interesting bit In the blurb there that gates of sub 10k would be deemed adequate/successful
Think the commercial / corporate element was the real driver behind the actions of both CCC and Wasps
Naming rights will be Interesting, whether they are one and the same as team sponsors
If they are would Wasps prefer the majority applied to team over ACLfor Instance?

 

[duffer]

ccc will be the main creditor and likely end up with the lease back to sell again.

We might not fully know if it's a good deal for the council but we do know it's a massive massive improvement over what the loan was previously and if it isn't considered a good deal it shows again how ccfc building their own stadium is simply not going to happen. Because the risk of lending to that is probably an order of magnitude higher and so will come with a significantly higher interest rate. I know I've said this before but a family member loans to a developer at 20% and it's secured (kinda anyway) and that project is way less risky than lending to sisu.

Appreciate the reply - I get the sense that some are ducking the question here when claiming that this is a great deal for the council, Ann Lucas included.

I agree that the lease will revert to the council, but then what happens. What if there's no one else to buy it?

Also, if this is a 'massive massive' improvement, doesn't it suggest that the original deal to bail out ACL was clearly flawed?

 

[duffer]

Interesting bit In the blurb there that gates of sub 10k would be deemed adequate/successful
Think the commercial / corporate element was the real driver behind the actions of both CCC and Wasps
Naming rights will be Interesting, whether they are one and the same as team sponsors
If they are would Wasps prefer the majority applied to team over ACLfor Instance?

That bit there - gates of sub-10k, surely that points to another stretch of the truth from Lucas et al - that we should do the deal so that Wasps could bring millions to the city's economy. Clearly they knew that that was rubbish even when they were saying it.

 

[torchomatic]

Yeah but...yeah but...

That bit there - gates of sub-10k, surely that points to another stretch of the truth from Lucas et al - that we should do the deal so that Wasps could bring millions to the city's economy. Clearly they knew that that was rubbish even when they were saying it.

 

[CCFCSteve]

Appreciate the reply - I get the sense that some are ducking the question here when claiming that this is a great deal for the council, Ann Lucas included.

I agree that the lease will revert to the council, but then what happens. What if there's no one else to buy it?

Also, if this is a 'massive massive' improvement, doesn't it suggest that the original deal to bail out ACL was clearly flawed?

You cant work on a load of "what ifs". The decision was made at the time for what the council believe was the right reasons (and probably partly due to the fact that they were sick of litigation after litigation). I'd imagine it also strengthens their Judicial Review appeal case...something that SISU decided to continue to pursue.

As I mentioned before, I'm gutted the council did the deal with Wasps as it removed one of the most important things in supporting a football team...Hope. Until a new stadium is built, club sold or incoming investment received then that wont return. At the very least people have to accept that SISU are equally, if not significantly more to blame, for the current situation. Cant remember who said it but for every action there's a reaction. We are now living with the councils reaction.

 

[tisza]

Appreciate the reply - I get the sense that some are ducking the question here when claiming that this is a great deal for the council, Ann Lucas included.

I agree that the lease will revert to the council, but then what happens. What if there's no one else to buy it?

Also, if this is a 'massive massive' improvement, doesn't it suggest that the original deal to bail out ACL was clearly flawed?

doesn't one of the articles say that there were at least two other interested parties?

 

[Mary_Mungo_Midge]

That bit there - gates of sub-10k, surely that points to another stretch of the truth from Lucas et al - that we should do the deal so that Wasps could bring millions to the city's economy. Clearly they knew that that was rubbish even when they were saying it.

Sub-10K gates will happen, yes.

But so will games such as Leinster; which was watched by 23,500. The Arena opened it's doors at 10:30, and was still serving beer at 7:30pm. Someone from Wasps told me they sold as much lager that day, as they did in the whole of last season.

Even Coventry RFC stalwarts like Ashdown have stated the place was awash with visiting fans. You can't take one game in isolation, and dismiss the whole motivation as 'rubbish' whilst carefully ignoring other games that prove the contrary?!?!?

 

[SkyBlue_Bear83]

Not sure If my maths are accurate
The best rent offer to the Club while maintaining the Status Quo was £400k
Possibly in Itself stressing ACL at that level

We are now paying circa £100k
Unless Wasps invigorate ACL to become far more successful in its secondary operations
we may find ourselves facing a rent hike or homeless as I can't see them subsidising us at their own expense

I suspect Wasps will be relying on CCFC and its supporters to subsidise them and many of our fans will be happy about it.

 

[fernandopartridge]

Sub-10K gates will happen, yes.

But so will games such as Leinster; which was watched by 23,500. The Arena opened it's doors at 10:30, and was still serving beer at 7:30pm. Someone from Wasps told me they sold as much lager that day, as they did in the whole of last season.

Even Coventry RFC stalwarts like Ashdown have stated the place was awash with visiting fans. You can't take one game in isolation, and dismiss the whole motivation as 'rubbish' whilst carefully ignoring other games that prove the contrary?!?!?

It works both ways.

 

[fernandopartridge]

Interesting bit In the blurb there that gates of sub 10k would be deemed adequate/successful
Think the commercial / corporate element was the real driver behind the actions of both CCC and Wasps
Naming rights will be Interesting, whether they are one and the same as team sponsors
If they are would Wasps prefer the majority applied to team over ACLfor Instance?

Sub 10k to what extent? The way its written suggests to the furthest extent! I think you're probably right, the naming rights is a big income generator. Interesting question too as to the application.

 

[duffer]

You cant work on a load of "what ifs". The decision was made at the time for what the council believe was the right reasons (and probably partly due to the fact that they were sick of litigation after litigation). I'd imagine it also strengthens their Judicial Review appeal case...something that SISU decided to continue to pursue.

As I mentioned before, I'm gutted the council did the deal with Wasps as it removed one of the most important things in supporting a football team...Hope. Until a new stadium is built, club sold or incoming investment received then that wont return. At the very least people have to accept that SISU are equally, if not significantly more to blame, for the current situation. Cant remember who said it but for every action there's a reaction. We are now living with the councils reaction.

Sorry Steve, I see your point but when you're talking about risking money 'what-ifs' are critical. You can't confidently make the right decision without those analyses. It's why I used to work in a bank in an area called Credit Risk (it wasn't as exciting as it sounds).

 

[Noggin]

Appreciate the reply - I get the sense that some are ducking the question here when claiming that this is a great deal for the council, Ann Lucas included.

I agree that the lease will revert to the council, but then what happens. What if there's no one else to buy it?

Also, if this is a 'massive massive' improvement, doesn't it suggest that the original deal to bail out ACL was clearly flawed?

If the Lease reverts to the council and no one wants to buy it (I don't really accept that is a realistic scenario) but should it happen the council would likely lose money, more realistically they couldn't sell it for enough and would lose some money but there is risk in any investment and personally I would happily loan ACL money at 11.35% interest if it were secured. In fact personally I'd possibly even lend to acl at 11.35% interest not secured but I'd have to think about that alot more, thats borderline, actually I've thought about it, I'd do it but not to more than 10% of my net worth.

no it shows the original deal was done at a cheaper rate because the council were protecting their investment. It suggests ACL couldn't have gotten the same deal elsewhere sure but that isn't the same as state aid because they were protecting their investment which the judge said was a reasonable thing to do and may have been done by a commercial entity in the councils position.

 

[duffer]

Sub-10K gates will happen, yes.

But so will games such as Leinster; which was watched by 23,500. The Arena opened it's doors at 10:30, and was still serving beer at 7:30pm. Someone from Wasps told me they sold as much lager that day, as they did in the whole of last season.

Even Coventry RFC stalwarts like Ashdown have stated the place was awash with visiting fans. You can't take one game in isolation, and dismiss the whole motivation as 'rubbish' whilst carefully ignoring other games that prove the contrary?!?!?

MMM, there's a fair point there I'd accept about taking things in isolation, but it cuts both ways! And when Lucas was talking about Wasps bringing £6 million per game into the local economy I'm afraid she was talking rubbish. That's arithmetically illiterate any which way you look at it. There might be the odd game with a large travelling crowd like Leinster, but it's daft to use that as a benchmark for Wasps value to the city; and even that brought nothing like that amount in.

 

[stupot07]

A bit of "banter" between Wasps and Leicester.

View attachment 4075
View attachment 4074

There is no PR machine.....


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors

 

[fernandopartridge]

R

MMM, there's a fair point there I'd accept about taking things in isolation, but it cuts both ways! And when Lucas was talking about Wasps bringing £6 million per game into the local economy I'm afraid she was talking rubbish. That's arithmetically illiterate any which way you look at it. There might be the odd game with a large travelling crowd like Leinster, but it's daft to use that as a benchmark for Wasps value to the city; and even that brought nothing like that amount in.

It seems to be based on the premise that all visitors to the stadium will come from outside of Coventry. Or those from Coventry would otherwise be spending their money outside of the area.

 

[duffer]

If the Lease reverts to the council and no one wants to buy it (I don't really accept that is a realistic scenario) but should it happen the council would likely lose money, more realistically they couldn't sell it for enough and would lose some money but there is risk in any investment and personally I would happily loan ACL money at 11.35% interest if it were secured. In fact personally I'd possibly even lend to acl at 11.35% interest not secured but I'd have to think about that alot more, thats borderline, actually I've thought about it, I'd do it but not to more than 10% of my net worth.

no it shows the original deal was done at a cheaper rate because the council were protecting their investment. It suggests ACL couldn't have gotten the same deal elsewhere sure but that isn't the same as state aid because they were protecting their investment which the judge said was a reasonable thing to do and may have been done by a commercial entity in the councils position.

Just to come back on this - if at any time you can't realise the amount of the loan by selling what it is secured against, then that loan is not properly secured. (Yorkshire Bank pointed this out to ACL incidentally, way back when they were holding the mortgage).

This isn't about state aid, this is about whether this is really a "great deal" for the council, as is purported here and elsewhere. I think it's possible to make a pretty reasonable argument that it isn't.

 

[Woz01]

There is no PR machine.....


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors

The poster was organised by Wasps fans after donating £800.

 

[Noggin]

Just to come back on this - if at any time you can't realise the amount of the loan by selling what it is secured against, then that loan is not properly secured. (Yorkshire Bank pointed this out to ACL incidentally, way back when they were holding the mortgage).

This isn't about state aid, this is about whether this is really a "great deal" for the council, as is purported here and elsewhere. I think it's possible to make a pretty reasonable argument that it isn't.

I agree that if you can't get all your money back by selling the asset your money isn't safe and there is some risk in this deal (significantly less risk than the original deal however), but whether the lease can be sold for the full value of the loan or not (and none of us know either way) I would take that deal 11.35% secured on the lease, I don't know if it's a great deal or not but I'd be very happy with my investment.

Instead of putting 10k in a stocks and shares nisa I'd would happily buy 10k of the councils loan assuming it came with the same percentage of the security.

 

[fernandopartridge]

Just to come back on this - if at any time you can't realise the amount of the loan by selling what it is secured against, then that loan is not properly secured. (Yorkshire Bank pointed this out to ACL incidentally, way back when they were holding the mortgage).

This isn't about state aid, this is about whether this is really a "great deal" for the council, as is purported here and elsewhere. I think it's possible to make a pretty reasonable argument that it isn't.

Indeed. IF Wasps fail the council will have to pay the bill or search for another franchise willing to repay a loan that doesn't get them anything.

 

[stupot07]

It has also emerged that initial discussions between Wasps and Coventry City Council began in early 2014


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors

 

[Mary_Mungo_Midge]

MMM, there's a fair point there I'd accept about taking things in isolation, but it cuts both ways! And when Lucas was talking about Wasps bringing £6 million per game into the local economy I'm afraid she was talking rubbish. That's arithmetically illiterate any which way you look at it. There might be the odd game with a large travelling crowd like Leinster, but it's daft to use that as a benchmark for Wasps value to the city; and even that brought nothing like that amount in.

I wouldn't disagree with that. £6m per game is preposterous. I know the Leicester game is moving towards sell-out. If - big if - but if the Toulon game was at The Ricoh, it'd sell-out twice over. Saracens will be well-populated, as will Harlequins. The interesting season will be next season. Which new players Wasps can attract - bearing in mind much business is already done - with their new financial landscape, and how may fans continue to go, with the attractiveness of novelty gone. One thing is for sure, it won't be £6m per game

 

[duffer]

I agree that if you can't get all your money back by selling the asset your money isn't safe and there is some risk in this deal (significantly less risk than the original deal however), but whether the lease can be sold for the full value of the loan or not (and none of us know either way) I would take that deal 11.35% secured on the lease, I don't know if it's a great deal or not but I'd be very happy with my investment.

Instead of putting 10k in a stocks and shares nisa I'd would happily buy 10k of the councils loan assuming it came with the same percentage of the security.

Noggin, I accept that you'd be prepared to take that risk, even though I'm not convinced you've thought it through properly. I know a little software company you can invest in that will (probably) bring you much better returns, PM me for further details.

The point I'm making is that the council sold us the original bailout telling us that there was no risk (even you seem to accept that wasn't true now), and have now ventured into another risky refinance claiming much the same thing.

 

[Noggin]

I wouldn't disagree with that. £6m per game is preposterous. I know the Leicester game is moving towards sell-out. If - big if - but if the Toulon game was at The Ricoh, it'd sell-out twice over. Saracens will be well-populated, as will Harlequins. The interesting season will be next season. Which new players Wasps can attract - bearing in mind much business is already done - with their new financial landscape, and how may fans continue to go, with the attractiveness of novelty gone. One thing is for sure, it won't be £6m per game

Thats £187 per person if she said wasps would bring 6mill a game she was clearly talking nonsense.

 

[Mary_Mungo_Midge]

It has also emerged that initial discussions between Wasps and Coventry City Council began in early 2014


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors

When SISU had moved the football club to Northampton, and some 9 months after Fisher was 'close to acquiring land' for his stadium site?

http://www.football.co.uk/coventry_...ium_site_rss4224420.shtml#dQGjDbipwXorwl7R.97

Seriously, faced with an empty pitch, what else would you expect them to do? :facepalm:

 

[lordsummerisle]

Thats £187 per person if she said wasps would bring 6mill a game she was clearly talking nonsense.

London Scottish will spend £0.27 per fan.

 

[Mary_Mungo_Midge]

Thats £187 per person if she said wasps would bring 6mill a game she was clearly talking nonsense.

Agreed. Absolute foolishness. Unless Exeter Chiefs travelling fans buying fuel and pasties at Taunton Deane services counts to as financial contribution?!?

 

[wingy]

8 sell out matches for an NFL franchise at Wembley is purportedly worth £120M
Don't ask me how they figure these things out:-(

 

[Noggin]

Noggin, I accept that you'd be prepared to take that risk, even though I'm not convinced you've thought it through properly. I know a little software company you can invest in that will (probably) bring you much better returns, PM me for further details.

The point I'm making is that the council sold us the original bailout telling us that there was no risk (even you seem to accept that wasn't true now), and have now ventured into another risky refinance claiming much the same thing.

Even me If the council said no risk it's clearly not true. I think the risk now though is low. I have thought about it properly (with security, I'm still unsure without the security and I'm swaying towards changing my mind) my family have spent alot of time discussing lending money to developers recently, a 13mill loan at 11.35% interest over 20 years pays back a total of a touch under £33million, For the council to lose out Wasps need to fail pretty quickly and for the ricohs value to have fallen alot.

I don't wish to invest in an small business though thank you unless it's secured, I don't have a great tolerance for risk.

 

[torchomatic]

Les Reid reported that last October, didn't he?

To achieve that over 20 yrs and taking in to account the initial £1m down payment equates to an interest APR 11.35% (repayment 1.7m pa). To achieve 19.5m interest over a shorter term
l

 

[duffer]

Even me If the council said no risk it's clearly not true. I think the risk now though is low. I have thought about it properly (with security, I'm still unsure without the security and I'm swaying towards changing my mind) my family have spent alot of time discussing lending money to developers recently, a 13mill loan at 11.35% interest over 20 years pays back a total of a touch under £33million, For the council to lose out Wasps need to fail pretty quickly and for the ricohs value to have fallen alot.

I don't wish to invest in an small business though thank you unless it's secured, I don't have a great tolerance for risk.

Noggin, if you'd be willing to put money into the Wasps/ACL deal then I'd say you'd got a bigger appetite for risk than you realise.

I'm talking equity here, Noggin, equity! A rising tide lifts all boats etc. - I'll stick our pitch on YouTube for you.

 

[oldskyblue58]

Les Reid reported that last October, didn't he?

Don't know to be honest Torch. I seem to remember he said it was over a shorter period but I thought he was quoted as saying that CCC had written off £1m of the loan which is very different to Wasps paying off £1m up front