Auditors query Coventry City FC as a going concern (11 Viewers)

[Astute]

That's not what is being argued. The argument is that we are better off staying at the Ricoh on the deal we are on now. That deal will see us bottom end of the championship at best although if you look at Stockport, the only other club in our situation, that would be wildly optimistic.

We need to find a way out of a situation which will slowly see the club die hence why I have previously said SISU, or anyone else that ends up owning us, should look at all possible options with solid financial projections to find the best way out of this mess.

Just settling for staying as a tenant as Wasps for decades to come with very limited access to revenues is not, in my opinion, the answer.

We all know that we need to move forward. SISU took us to gutter level and seem to be taking us lower. Wanting something that we have not paid for is the SISU way. Look where it has got us. Our best way forward as things stand is to rent the Ricoh and get income streams like Fisher said we are getting. And with an astute manager we have the chance of going forward. It may be a big ask as things stand, but promotion to the Championship leaves us one step away from having the money for a home. Spend half of the Sky windfall on a home. Mowbray could be the one. Top priority is keeping him.

 

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[steveecov]

It was long talked that if RA at Chelsea ever got bored and wanted out, their position would be untenable.

I think the only real solution to EVER have a "dream future", is a very rich benefactor.

Sisu's pockets are just not deep enough.

 

[italiahorse]

That's not what is being argued. The argument is that we are better off staying at the Ricoh on the deal we are on now. That deal will see us bottom end of the championship at best although if you look at Stockport, the only other club in our situation, that would be wildly optimistic.

We need to find a way out of a situation which will slowly see the club die hence why I have previously said SISU, or anyone else that ends up owning us, should look at all possible options with solid financial projections to find the best way out of this mess.

Just settling for staying as a tenant as Wasps for decades to come with very limited access to revenues is not, in my opinion, the answer.

You need to get over the fact that we can't afford a new stadium, then common sense will switch in.
A long term deal with Wasps at the Ricoh is our only option at the moment.

Sisu management could get off their arses and start generating our own additional incomes. Perhaps starting with the shop!!
Wasps dress the stadium up on their match days so why don't we do the same? It's only a few temporary sheets of canvass around the stadium and a few posters outside.

The Ricoh already has CCFC history built into it. Statue, memorial garden, the named walls, blue seats with CCFC and Sky Blues spelt out.
Don't see the Wasps fans moaning about it.
Perhaps investigate sharing common facilities, to half charges, like ticket office, shop, offices, training facilities etc

 

[chiefdave]

Our best way forward as things stand is to rent the Ricoh and get income streams like Fisher said we are getting.

The problem is there is absolutely no way you can state that as fact. From what we are led to believe we are paying £100K a year and receive around 50% of certain matchday revenue streams, although there is uncertainly if that is 50% of revenues or 50% of profit.

What if we move to a new ground and pay £100K a year and get all revenues 365 days a year, are we not better off?

Until we know exactly what we would be paying and what we would get in return it is impossible to state one option is better than the other, hence the need for full financial projections of all options.

What we do know is that it is incredibly unlikely we will get any level of success with the access to revenues at the level we currently have.

 

[rupert_bear]

I still think there's options to buy into the Ricoh Arena for any would be mega rich owner ( I wish) of Coventry City Football Club. At the moment there is one party ,Wasps, with 100% shares, I am certain there would be opportunity to buy shares up to 49%,which is 49% better than we had before the Ricoh was sold.

 

[italiahorse]

What if we move to a new ground and pay £100K a year and get all revenues 365 days a year, are we not better off?

The interest on a £25M stadium alone would be over a £1M a year before we start.
We would need to generate some big incomes before we could start to move into profit. Who's profit would it be anyhow if we rent the stadium .... Sisu's management company ?
£100K a year would take 250 years to pay off plus interest.
What incomes would we generate at a stadium say at Coventry Airport ? Perhaps something like that generated by the Sky Blue connection at Ryton ?

Come on, think about it.
I'm not saying it's ideal but at least Sisu should give it ago.

 

[steveecov]

I still think there's options to buy into the Ricoh Arena for any would be mega rich owner ( I wish) of Coventry City Football Club. At the moment there is one party ,Wasps, with 100% shares, I am certain there would be opportunity to buy shares up to 49%,which is 49% better than we had before the Ricoh was sold.

Would really like to think something could happen.

Meantime, wouldn't it be nice, if just for the few years where the rent IS reasonable that we had something to be positive about.

What I mean is a settled team we can identify with for a couple of years.

Lord knows we deserve it.

 

[chiefdave]

The interest on a £25M stadium alone would be over a £1M a year before we start.
We would need to generate some big incomes before we could start to move into profit. Who's profit would it be anyhow if we rent the stadium .... Sisu's management company ?
£100K a year would take 250 years to pay off plus interest.
What incomes would we generate at a stadium say at Coventry Airport ? Perhaps something like that generated by the Sky Blue connection at Ryton ?

Come on, think about it.
I'm not saying it's ideal but at least Sisu should give it ago.

You're making the assumption SISU fund the thing up front. Look at the Ricoh build, very little of the build cost was cash from CCC, somewhere in the region of 10% from memory. Apply that to a new ground and the financing on your £25m stadium is £2.5mm and loan repayments of around 10% the level you suggest.

Of course that may not be achiveable given the possible location of the stadium and the current economic climate but to just write that option off and say take any offer we can get from Wasps is crazy.

Maybe the Trust should approach Wasps and ask the question would they be prepared to discuss a long term deal for us to stay on the basis that we receive all the revenue we generate. That is the absolute minimum we need to achieve from any deal.

 

[Astute]

The problem is there is absolutely no way you can state that as fact. From what we are led to believe we are paying £100K a year and receive around 50% of certain matchday revenue streams, although there is uncertainly if that is 50% of revenues or 50% of profit.

What if we move to a new ground and pay £100K a year and get all revenues 365 days a year, are we not better off?

Until we know exactly what we would be paying and what we would get in return it is impossible to state one option is better than the other, hence the need for full financial projections of all options.

What we do know is that it is incredibly unlikely we will get any level of success with the access to revenues at the level we currently have.

Sounds good. But it is a massive 'what if'

So who is going to spend at least 30m on building a ground for us to take all profits and only charge us 100k rent? That is a return of 0.333% We need to have our own ground. But we are not in a position to do it in Division 3. 100k rent until we are in a psoition to do something is the best way forward I can see as things stand. And when we can afford repayments of over 1m a year we can look into it. But look very carefully.

 

[torchomatic]

Surely, so is staying put at the Ricoh? The 100K rent deal is great compared to 1.2M but we still only keep half of what WE generate on OUR match days.

And how long are Wasps going to be happy with £100K? Next season they won't be helping out their travelling STH from London and presumably the freebies and incentives will have run dry, so I wouldn't be surprised they will hike up the price when they can.

Sounds good. But it is a massive 'what if'

 

[Astute]

You're making the assumption SISU fund the thing up front. Look at the Ricoh build, very little of the build cost was cash from CCC, somewhere in the region of 10% from memory. Apply that to a new ground and the financing on your £25m stadium is £2.5mm and loan repayments of around 10% the level you suggest.

Of course that may not be achiveable given the possible location of the stadium and the current economic climate but to just write that option off and say take any offer we can get from Wasps is crazy.

Maybe the Trust should approach Wasps and ask the question would they be prepared to discuss a long term deal for us to stay on the basis that we receive all the revenue we generate. That is the absolute minimum we need to achieve from any deal.

Tescos put in nearly 50% of all costs. That won't happen again. CCC put in 10m of their own money. That won't happen again. A lot of the rest came from European grants. Unless we build on a piece of land contaminated badly and in a deprived area again that won't happen again.

Yes we need to get as much revenue generated by ourselves as we can get. But to write off having 100k rent and a share of revenue whilst we are in such a bad place is mental. We can't afford to build. SISU don't show anything to give us any faith on them building a stadium. Which leads us to being realistic.

 

[Astute]

Surely, so is staying put at the Ricoh? The 100K rent deal is great compared to 1.2M but we still only keep half of what WE generate on OUR match days.

And how long are Wasps going to be happy with £100K? Next season they won't be helping out their travelling STH from London and presumably the freebies and incentives will have run dry, so I wouldn't be surprised they will hike up the price when they can.

Have we any options? 100k rent is at least fair. We paid 170k for Northampton . Until things change what other options do we have? I don't count Northampton as an option, although I wouldn't say it won't happen if SISU think it might distress Wasps. Don't want to go through all that BS again.

 

[torchomatic]

Distress Wasps? Oh, is that going to be the new buzz phrase? Ask MMM, Wasps are doing brilliantly and are the envy of the Aviva Premiership. I'm sure the Maltese Hedge Fund will look after them. It pains me to say it, but Wasps will be here long after CCFC have disappeared.

Have we any options? 100k rent is at least fair. We paid 170k for Northampton . Until things change what other options do we have? I don't count Northampton as an option, although I wouldn't say it won't happen if SISU think it might distress Wasps. Don't want to go through all that BS again.

 

[dongonzalos]

The problem is there is absolutely no way you can state that as fact. From what we are led to believe we are paying £100K a year and receive around 50% of certain matchday revenue streams, although there is uncertainly if that is 50% of revenues or 50% of profit.

What if we move to a new ground and pay £100K a year and get all revenues 365 days a year, are we not better off?

Until we know exactly what we would be paying and what we would get in return it is impossible to state one option is better than the other, hence the need for full financial projections of all options.

What we do know is that it is incredibly unlikely we will get any level of success with the access to revenues at the level we currently have.

The other couple of points to consider are

If the new stadium is built in the manner conducted so far.....

Shrouded with secrecy you run the danger of alienating your fan base. A lot of people say that is has to be within the city boundaries ( not myself ). However for some that is very important. Also if fans are not part of the process they will not buy into it.

Whilst we divert funds to building a new stadium ( I believe it will be part funded by us and part by other investors). We will need to strive towards break even point. So when we get the new stadium the revenue we are desperate for allows the club to become self sustainable. As we strive towards break even I struggle to see a resurgence of success. Crowds are likely to stay at this level or dwindle further. It seems most suggest they will fall when the new stadium is built.
So you are getting access to more revenue, generated by lower crowds.

Next I think we currently pay 1.5 -2 million a year on a 9 million loan from ARVO? That's an interest rate of around 15%

I assume we would have to at least double that for our contribution to a new stadium so 4 million a year in interest to come off our newly accessed revenue. Interest in debt counts in FFP, if we are promoted to the championship.

So my concerns are we move to a new stadium and crowds drop. The debt goes up and we end up worse off than our current deal.

I think two routes are better for CCFC.

Work out how much we need to borrow to invest in the new stadium.

Offer a couple of million less than that to Wasps for 49% of ACL. Request they use the money to clear a large chunk of the loan as part of the deal.

If this doesn't work

Invest that money in a playing squad capable of blowing this league apart. Get the increase in crowds a completely starved of success for 25 years CCFC fan base would bring. Also compete at a level that gets the club at some point 6th in the championship.

Sell the Premiership dream (100 million for last spot) for enough that SISU get their investment (real terms) back.

 

[chiefdave]

Sounds good. But it is a massive 'what if'.

Everything is a what if hence why I keep suggesting all options should be fully explored to establish the best route forward. You say anyone building a new ground would not accept £100K a year rent after putting millions into a build, aren't Wasps in essentially the same situation?

 

[Astute]

Everything is a what if hence why I keep suggesting all options should be fully explored to establish the best route forward. You say anyone building a new ground would not accept £100K a year rent after putting millions into a build, aren't Wasps in essentially the same situation?

Different situation for Wasps. They also use the ground. They didn't spend 30m. We are helping them pay for the Ricoh

 

[Rusty Trombone]

The club can't afford to build a ground without someone putting all the money in, whether that be a SISU company or other businesses. The club cannot afford to pay a high rent to anyone, whether that be a SISU company or anyone else. So it doesn't bother me if a new ground gets built as the club is never likely to be in a position to pay for it. The cost will ultimately fall on whoever is foolish enough to fund it.

 

[Astute]

Distress Wasps? Oh, is that going to be the new buzz phrase? Ask MMM, Wasps are doing brilliantly and are the envy of the Aviva Premiership. I'm sure the Maltese Hedge Fund will look after them. It pains me to say it, but Wasps will be here long after CCFC have disappeared.

We know nothing. How well will they do next season when the free transport ends for their fans? Will the free tickets continue? Will their owner continue to put his own money in if project Ricoh fails? Wasps failing seems our most realistic chance of having our own stadium as things stand.

 

[steveecov]

When do the new kits come out?

Went up the "shop" yesterday. So much needs to be done.

Must be able to get multiple outlets; in the city centre and up the Ricoh.

Sure we used to rent space in Owen Owen.

Sisu actually contribute to the NOPM, because they can't even spot immediate revenue, and offer very much.

Running a business, they haven't a clue. A football business; even less.

 

[torchomatic]

I agree and personally preferable to a new stadium. However, if it was a toss up between a new stadium (properly located) and continuing to rent from Wasps with reduced income then I would go with the former.

Wasps failing seems our most realistic chance of having our own stadium as things stand.

 

[skybluetony176]

When do the new kits come out?

Went up the "shop" yesterday. So much needs to be done.

Must be able to get multiple outlets; in the city centre and up the Ricoh.

Sure we used to rent space in Owen Owen.

Sisu actually contribute to the NOPM, because they can't even spot immediate revenue, and offer very much.

Running a business, they haven't a clue. A football business; even less.

We use to have a shop in West Orchards many years ago. Might not be a bad move to do it again given how far the Ricoh is from the city centre and how far the current shop is away from the other side of town.

 

[shy_tall_knight]

Only long-term solution is to buy 50% of ACL.

Anyone thinking SISU are seriously looking at building a new stadium provide one scrap of evidence that will support such a notion. They need to get their money back, doubt it is anywhere near £50m. Throwing £25m more at a new stadium as Spock would say "highly illogical".

 

[torchomatic]

What incentive is there for Wasps to sell it?

 

[skybluetony176]

Only long-term solution is to buy 50% of ACL.

Anyone thinking SISU are seriously looking at building a new stadium provide one scrap of evidence that will support such a notion. They need to get their money back, doubt it is anywhere near £50m. Throwing £25m more at a new stadium as Spock would say "highly illogical".

Oh Shit! With SISU's history of doing the illogical I'm now conviced its going to happen :facepalm:

 

[skybluetony176]

What incentive is there for Wasps to sell it?

I'd say risk reduction but then you've got to remember who would be buying.

 

[torchomatic]

Didn't he also say "live long and prosper"? Not likely with SISU or renting from Wasps.

Oh Shit! With SISU's history of doing he illogical I'm now conviced its going to happen :facepalm:

 

[lewys33]

If the article is correct and we are paying 100k a year, and getting 50% of revenue then I don't see what is better than that in the short term? Long term - wait for wasps to pay off the loan then buy 50% of ACL. Or Wasps fail, and have to sell cheap.

Simple way of looking at it I know, but I don't see how spending 20-30 million on a stadium to probably pay the same if not more rent to a SISU owned management company is worth an extra 50% in revenue money.

 

[Astute]

I agree and personally preferable to a new stadium. However, if it was a toss up between a new stadium (properly located) and continuing to rent from Wasps with reduced income then I would go with the former.

The problem is that renting is for people unable to buy for different reasons. And we seem unable to buy.

Wasps failing seems like our best chance. Mowbray getting us to play like a team and getting us to the Prem next. Otherwise we look like being long term renters wherever we end up. Or on the slight chance SISU build a stadium.

 

[skybluetony176]

Didn't he also say "live long and prosper"? Not likely with SISU or renting from Wasps.

I wish i knew how to do the Vulcan Death Grip. I'd have sorted this shit out long ago.

 

[italiahorse]

We know nothing. How well will they do next season when the free transport ends for their fans? Will the free tickets continue? Will their owner continue to put his own money in if project Ricoh fails? Wasps failing seems our most realistic chance of having our own stadium as things stand.

Don't you mean Sisu owning their own stadium ?
We could be at their mercy long after they have left !!

Plus they would need to stress ACL before they get it with may I suggest a move to Northampton.

I'll be long gone.

 

[torchomatic]

Well, 100% of revenues would be better. But yeah, rent is fine.

If the article is correct and we are paying 100k a year, and getting 50% of revenue then I don't see what is better than that in the short term? Long term - wait for wasps to pay off the loan then buy 50% of ACL. Or Wasps fail, and have to sell cheap.

Simple way of looking at it I know, but I don't see how spending 20-30 million on a stadium to probably pay the same if not more rent to a SISU owned management company is worth an extra 50% in revenue money.

 

[torchomatic]

Promises, promises.

I'll be long gone.

 

[dongonzalos]

What incentive is there for Wasps to sell it?

Give them an incentive

Pay more than they paid for it (instant profit)
Invest in our playing squad so we go to the top of league one. They see the club are serious about making CCFCa success so they will get more from their remaining 50%

They can get rid of most of the loan in one go.

Sell a partnership to them that makes their long term future secure and profitable and less risky

Whatever you do DONT piss them off. Try and force them into a corner. Try to put them out of business. Threaten them. Take legal action against them. My gut instinct tells me it would be Hell freezing over before they would sell to you in those circumstances

 

[Astute]

What incentive is there for Wasps to sell it?

Their supporters stop going and say they will not go again until they are back where they should be. A bit like us and Northampton. Some diehards still went. Most didn't. And we were only 34 miles away. We would have got more if free transport was put on. So will Wasps. My biggest expense going to games is the fuel. Then the hotel or beer.....very close between the two. Then comes the match ticket. Free transport would mean no fuel or hotel. Suddenly becomes much cheaper. And easier to do. Like I say lets wait until half way through next season. An empty stadium was costing CCC. They sold cheaply. If Wasps end up going back where they should be they would be left with an empty stadium as SISU would take us elsewhere if they thought it would help. Would they want to keep something that cost them money for no benefit or would they sell cheaply?

 

[stupot07]

Give them an incentive

Pay more than they paid for it (instant profit)
Invest in our playing squad so we go to the top of league one. They see the club are serious about making CCFCa success so they will get more from their remaining 50%

They can get rid of most of the loan in one go.

Sell a partnership to them that makes their long term future secure and profitable and less risky

Wasps don't want an instant profit, they want to become the best club in Europe.

It would be that beneficial to wasps anyway. We would keep all of the revenue we make, they keep all the revenue they make. So it's all the other revenue that they would have to share. Us being in the championship isn't going to increase bookings for the exhibition hall, etc....

So selling us the 50% means they miss out on 50% income from our games, and have to give up 50% of the other profit. How does that satisfy their losses, fund them and their ambitions to become the best team in Europe?

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