The low down on ARVO (4 Viewers)

[skybluetony176]

If they don't want to be in a position where they have to keep investing money it's probably a good idea to invest in the people who can deliver that scenario first.

 

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[chiefdave]

I think that would be a problem Chief. No investment would mean a team based roughly on the same as we have now, this would mean relegation at some point. The further they go down the league structure the closer they and we are to the abyss.

Maybe they thing the revenue's in L2 will not be significantly less than L1, and of course the wage budget would go down again. On the one hand you can kind of see their point, you shouldn't have to run at a 7 figure loss to stand a chance of success, although they have claimed we have a top 8 budget.

Not sure how building a new stadium and financing that stacks up against being self sustaining. That could be a 50 year or longer plan, not sure even RFC wants them here that long!

 

[Sub]

That's no investment from SISU or AVRO as they want the club to be self sufficient rather than them having to pump millions in every year. To be fair they haven't made a secret of that. The downside for us is if they can achieve that they can hang around almost indefinitely hoping for a miracle to get their money back.

They completely fucked themselves with any chance of getting their money back by screwing up any chance of buying the stadium and the main thing was completely fucking the fans over by moving to northampton and alienating their only major source of revenue and that is what all clubs need. Alot of fans will never forgive them for that and our shit performances through lack of investment is never going to bring them back so the downward spiral continues. Sisu have taken away from the fans what every fan in every club needs which is HOPE, without that the club is well and truly screwed,

 

[Jack Griffin]

That's no investment from SISU or AVRO as they want the club to be self sufficient rather than them having to pump millions in every year. To be fair they haven't made a secret of that. The downside for us is if they can achieve that they can hang around almost indefinitely hoping for a miracle to get their money back.

Which contradicts the 'we will build a new stadium' mantra. Do you not think there is a logical flaw in there somewhere?

 

[chiefdave]

Which contradicts the 'we will build a new stadium' mantra. Do you not think there is a logical flaw in there somewhere?

Depends on the finance model and the net figures, if a new stadium leaves them better off every year then it would be a justification for building it. Hence why we need to see comparative projections for a new stadium and staying at the Ricoh.

 

[martcov]

Depends on the finance model and the net figures, if a new stadium leaves them better off every year then it would be a justification for building it. Hence why we need to see comparative projections for a new stadium and staying at the Ricoh.

You cannot do any projections until you have a costing for the build and site of the new stadium and an offer from Wasps for secured tenure over a long period at the Ricoh. One phone call or meeting with RBC which didn't come to anything and no approach ( as far as we know ) to Wasps regarding long term tenancy, doesn't show any ambition either way. There can be no finance model other than a rough sketch on the back of a beer mat saying ca 30m for a stadium ( one price quoted by TF ). We now know that after SPs departure there were no professional structures in place regarding player recruitment. If they don't even have a game plan for the team, then I am afraid then we are just drifting and waiting for something good to come along. In the meantime battening down the hatches as regards expenditure ( see the paste table photo ). Let's hope TM can sell the idea of professionalism with regard to the team. Then at least we my have some success on the footballing side.

 

[Hobo]

Can anybody translate / simplify?

We haven't got a pot to piss in.
Joy Seppala has received fees for investing other people's money long term.
The other people probably won't see a return.
it was part of their pension fund, although it might have been a high risk investment.

that is how I understand it.

 

[Deleted member 5849]

Which contradicts the 'we will build a new stadium' mantra. Do you not think there is a logical flaw in there somewhere?

Well...no.

The problem is, any money put in is expected to make a return - that's *always* been the problem. Initially there was a certain logic in popping a spot of cash into the playing side, as the prize was a place in the top flight, and the vast increase in value of the club as a result. Problem is, that was always fraught with difficulty... what if it goes wrong?

Well... now we know.

So, having seen that to a degree that approach to making a return is rather random, even high risk speculators might write that approach off as a dead duck. If a ground can make a return in some way however, it will happen. No logical flaw there that they'd pump money into an alternative avenue. To a degree, it's merely reversing what McGinnity once pointed out to me, when I asked him why, if ownership of the ground was so important, we were spunking cash on Stern John and (attempting to on!) Malky Mackay. Then, they were different pots, just the priorities were different.

What's of more concern is the fact that everybody (owners, council... fans) seems to have bought into this way of talking about a *club*. Nobody, but *nobody* seems willing to put forward what the essence of a club, our club, actually is.

And that isn't necessarily a decimal point on the stock exchange.

 

[Astute]

Well...no.

The problem is, any money put in is expected to make a return - that's *always* been the problem. Initially there was a certain logic in popping a spot of cash into the playing side, as the prize was a place in the top flight, and the vast increase in value of the club as a result. Problem is, that was always fraught with difficulty... what if it goes wrong?

Well... now we know.

So, having seen that to a degree that approach to making a return is rather random, even high risk speculators might write that approach off as a dead duck. If a ground can make a return in some way however, it will happen. No logical flaw there that they'd pump money into an alternative avenue. To a degree, it's merely reversing what McGinnity once pointed out to me, when I asked him why, if ownership of the ground was so important, we were spunking cash on Stern John and (attempting to on!) Malky Mackay. Then, they were different pots, just the priorities were different.

What's of more concern is the fact that everybody (owners, council... fans) seems to have bought into this way of talking about a *club*. Nobody, but *nobody* seems willing to put forward what the essence of a club, our club, actually is.

And that isn't necessarily a decimal point on the stock exchange.

So is Joy lying when she says our club must be self sufficient and they won't be putting any more money in? And 'they' includes money invested by others. Which is what the vast majority of the money lost seems to be.

 

[Deleted member 5849]

So is Joy lying when she says our club must be self sufficient and they won't be putting any more money in? And 'they' includes money invested by others. Which is what the vast majority of the money lost seems to be.

The problem is, any money put in is expected to make a return - that's *always* been the problem. Initially there was a certain logic in popping a spot of cash into the playing side, as the prize was a place in the top flight, and the vast increase in value of the club as a result. Problem is, that was always fraught with difficulty... what if it goes wrong?

Well... now we know.

So, having seen that to a degree that approach to making a return is rather random, even high risk speculators might write that approach off as a dead duck. If a ground can make a return in some way however, it will happen. No logical flaw there that they'd pump money into an alternative avenue. To a degree, it's merely reversing what McGinnity once pointed out to me, when I asked him why, if ownership of the ground was so important, we were spunking cash on Stern John and (attempting to on!) Malky Mackay. Then, they were different pots, just the priorities were different.

What's of more concern is the fact that everybody (owners, council... fans) seems to have bought into this way of talking about a *club*. Nobody, but *nobody* seems willing to put forward what the essence of a club, our club, actually is.

And that isn't necessarily a decimal point on the stock exchange.

 

[chiefdave]

So is Joy lying when she says our club must be self sufficient and they won't be putting any more money in? And 'they' includes money invested by others. Which is what the vast majority of the money lost seems to be.

I'd don't think she'd class building a stadium as putting money into the club, more putting money into a stadium. The hope would be that the stadium could make money and add value to the club should they be sold as a package.

 

[Jack Griffin]

I'd don't think she'd class building a stadium as putting money into the club, more putting money into a stadium. The hope would be that the stadium could make money and add value to the club should they be sold as a package.

Yet to be convinced there is a model that makes any sense, unless someone else stumps up most of the money, gifts ARVO the stadium and expects cock all in return.

 

[Godiva]

I'd don't think she'd class building a stadium as putting money into the club, more putting money into a stadium. The hope would be that the stadium could make money and add value to the club should they be sold as a package.

Why would they even sell the stadium?
The plan seem to be to build the stadium owned by their investors. Then have the club establish a stadium management company buying a long lease (sisu investors are probably happy to provide a loan to buy the lease). Finally they can sell the club and stadium management company as a package (but keep the stadium).

 

[Deleted member 5849]

Why would they even sell the stadium?
The plan seem to be to build the stadium owned by their investors. Then have the club establish a stadium management company buying a long lease (sisu investors are probably happy to provide a loan to buy the lease). Finally they can sell the club and stadium management company as a package (but keep the stadium).

Out of idle curiosity, what in your view would be the benefit to them of keeping freehold while selling, say, a 250 year lease along with the football club?

 

[Godiva]

Out of idle curiosity, what in your view would be the benefit to them of keeping freehold while selling, say, a 250 year lease along with the football club?

Maybe the club won't be the only business there?

 

[skybluetony176]

Why would they even sell the stadium?
The plan seem to be to build the stadium owned by their investors. Then have the club establish a stadium management company buying a long lease (sisu investors are probably happy to provide a loan to buy the lease). Finally they can sell the club and stadium management company as a package (but keep the stadium).

I wonder how much a lease of 250years for SISU towers would be? Given the precedent set by the 250year lease of the Ricoh is that going to be a return SISU investors are going to be happy with? If there is indeed a return.

 

[Godiva]

Out of idle curiosity, what in your view would be the benefit to them of keeping freehold while selling, say, a 250 year lease along with the football club?

Try this:

If they build a stadium for say £18m (including ground purchase), add a couple of millions for themselves and sell a long lease for £20m to the stadium management club, then they have made a nice little £2m profit right there.
They also lend the stadium management company the £20m (used to pay themselves) at say 6% or 7% over 20 or maybe even 30 years. That's a nice profit too.

 

[Sky Blue Harry H]

This ***ing saga just makes me think of the "There's a hole in my bucket, dear Liza...." After a few rounds of trying to follow the logic, we end up back at the same point again. It's like trying to work out a problem that you know can never solve (as you don;'t have thee capacity/ability) yet still you must try as it means so damn much..........hence why we all get so frustrated. GGGrrrrrrrrr

 

[martcov]

Maybe the club won't be the only business there?

What else do you expect? McDonalds? Hot dogs?

 

[martcov]

Try this:

If they build a stadium for say £18m (including ground purchase), add a couple of millions for themselves and sell a long lease for £20m to the stadium management club, then they have made a nice little £2m profit right there.
They also lend the stadium management company the £20m (used to pay themselves) at say 6% or 7% over 20 or maybe even 30 years. That's a nice profit too.

How much did Wasps pay for a long lease on a 32000 stadium with conference facilities etc? I thought TF mentioned 30m for a stadium at one stage. Sorry mate, but your figures are just plucked out of thin air. I could say what if they bought a stadium for 30m which was too small and had too few facilities and which became a white elephant? They then sell it as scrap for 50000 and 1000000 for the land. Also vaguely possible.

 

[Godiva]

How much did Wasps pay for a long lease on a 32000 stadium with conference facilities etc? I thought TF mentioned 30m for a stadium at one stage. Sorry mate, but your figures are just plucked out of thin air. I could say what if they bought a stadium for 30m which was too small and had too few facilities and which became a white elephant? They then sell it as scrap for 50000 and 1000000 for the land. Also vaguely possible.

Why keep bringing up Wasps? It's not like they are our new best friends, is it?
We can't buy ACL now, so that ship has sailed. We need a new home (and hopefully one where we can actually win a game or two).
Even if the final price is £25m for a perfectly suitable 16.000 seater the principle will be the same. It will just cost the club a few thousand more per months.

 

[fernandopartridge]

How much did Wasps pay for a long lease on a 32000 stadium with conference facilities etc? I thought TF mentioned 30m for a stadium at one stage. Sorry mate, but your figures are just plucked out of thin air. I could say what if they bought a stadium for 30m which was too small and had too few facilities and which became a white elephant? They then sell it as scrap for 50000 and 1000000 for the land. Also vaguely possible.

Wasps paid £5.4m to buy £14.4m of debt and a 250 year lease. Isn't it 20 years of repayments at over £1m p/a?

 

[bigfatronssba]

Try this:

If they build a stadium for say £18m (including ground purchase), add a couple of millions for themselves and sell a long lease for £20m to the stadium management club, then they have made a nice little £2m profit right there.
They also lend the stadium management company the £20m (used to pay themselves) at say 6% or 7% over 20 or maybe even 30 years. That's a nice profit too.

What you've basically said there then is CCFC will be in debt to Sisu for the next 30 years?

Sorry if I don't give my backing to that one.

 

[chiefdave]

What you've basically said there then is CCFC will be in debt to Sisu for the next 30 years?

Sorry if I don't give my backing to that one.

Again it depends on the figures. Paying SISU, or anyone else for that matter, say £1m a year but getting access to £5m in revenue is better than paying Wasps £100K a year and getting £1m in revenue.

 

[Godiva]

What you've basically said there then is CCFC will be in debt to Sisu for the next 30 years?

Sorry if I don't give my backing to that one.

Did I say that?

I would expect a new owner to buy out that loan when they take over.
Just like I would have expected Wasps to buy out the council loan to the council. That didn't happen and indicate Wasps owners don't really have too much financial backing power.

Anyway, would you prefer the club owed money to a bank instead? Even ACL discovered how that could bring them in trouble.

 

[bigfatronssba]

Did I say that?

I would expect a new owner to buy out that loan when they take over.
Just like I would have expected Wasps to buy out the council loan to the council. That didn't happen and indicate Wasps owners don't really have too much financial backing power.

Anyway, would you prefer the club owed money to a bank instead? Even ACL discovered how that could bring them in trouble.

So what happens to CCFC and its associated stadium management company if/when it can't make the repayments owed to Sisu?

 

[martcov]

Again it depends on the figures. Paying SISU, or anyone else for that matter, say £1m a year but getting access to £5m in revenue is better than paying Wasps £100K a year and getting £1m in revenue.

Where do you get the figure of 5m from? Are Wasps making 5m a year from the Ricoh? ( as an example )

 

[Noggin]

Try this:

If they build a stadium for say £18m (including ground purchase), add a couple of millions for themselves and sell a long lease for £20m to the stadium management club, then they have made a nice little £2m profit right there.

building it for 18 mill over a couple of years and selling it for 2m profit is only 5% a year profit they almost certainly can't get the money this cheaply and so it would be a loss really (ignoring the fact there is no way the stadium would be that cheap to build) investors don't take on such risks for such small profits. Have you seen the website funding circle? you can lend to businesses at up to 15% interest (and even at this rate they are much much less risky projects than this one would be), you can split your money between hundreds of companys to lower risk to very low levels and get an easy 6.5%+ return after bad debts, even more sensible you invest in a ftse all share tracker, in a all developed world tracker, an emerging markets tracker and a few others to spice things up, then throw in some funding circle money and you've got a diverse portfolio that will hopefully provide say 7% a year over the long term at miniscule risk compared to lending to sisu to build a stadium.

If your investing in something so risky you want to make a fortune if it comes off otherwise there is no reason whatsoever to take the risk and this upside just doesn't exist.

There is a woodford ipo tomorrow for a fund from the uks most successful fund manager that is going to invest in early stage companies with disruptive technologys and patents, its easy to see how this is risky, if it invests in say 100 companies and they all fail you lose your money, but if they succeed there is massive upside and you could make your money back many times over, how is lending to sisu to build a stadium more appealing that investing in this? it's simply not, the upside isn't there and the downside is much more likely. Woodford will also only take his fee if the fund is over 10% a year up.

edit- the ipo isn't tomorrow thats just when you have to put your order and funds in by at my broker.

 

[Godiva]

So what happens to CCFC and its associated stadium management company if/when it can't make the repayments owed to Sisu?

If sisu can't pay sisu?

 

[martcov]

Why keep bringing up Wasps? It's not like they are our new best friends, is it?
We can't buy ACL now, so that ship has sailed. We need a new home (and hopefully one where we can actually win a game or two).
Even if the final price is £25m for a perfectly suitable 16.000 seater the principle will be the same. It will just cost the club a few thousand more per months.

Wasps are tenants with a long lease and of a stadium in Coventry. Whether we are friends or not, we can look at their experience to get an idea of what a stadium in Coventry can generate.

 

[Godiva]

building it for 18 mill over a couple of years and selling it for 2m profit is only 5% a year profit they almost certainly can't get the money this cheaply and so it would be a loss really (ignoring the fact there is no way the stadium would be that cheap to build) investors don't take on such risks for such small profits. Have you seen the website funding circle? you can lend to businesses at up to 15% interest (and even at this rate they are much much less risky projects than this one would be), you can split your money between hundreds of companys to lower risk to very low levels and get an easy 6.5%+ return after bad debts, even more sensible you invest in a ftse all share tracker, in a all developed world tracker, an emerging markets tracker and a few others to spice things up, then throw in some funding circle money and you've got a diverse portfolio that will hopefully provide say 7% a year over the long term at miniscule risk compared to lending to sisu to build a stadium.

If your investing in something so risky you want to make a fortune if it comes off otherwise there is no reason whatsoever to take the risk and this upside just doesn't exist.

There is a woodford ipo tomorrow for a fund from the uks most successful fund manager that is going to invest in early stage companies with disruptive technologys and patents, its easy to see how this is risky, if it invests in say 100 companies and they all fail you lose your money, but if they succeed there is massive upside and you could make your money back many times over, how is lending to sisu to build a stadium more appealing that investing in this? it's simply not, the upside isn't there and the downside is much more likely. Woodford will also only take his fee if the fund is over 10% a year up.

I think you compare apples with bananas. The stadium is a property, and current mortgage rates are well under 4%. It has nothing to do with stocks or business loans or IPO's - it's a property investment.

 

[chiefdave]

Where do you get the figure of 5m from? Are Wasps making 5m a year from the Ricoh? ( as an example )

It was an example for Ron who said he wouldn't back a stadium that put us in debt, purely to show that it doesn't mean any plan should be disregarded. There are no figures available hence the need for proper business plans and forecasts.

The point I was making was that having a debt, whoever it is to, is not necessarily a bad thing if that money is invested in something that generates money, preferably over the amount needed to service the debt.

 

[bigfatronssba]

If sisu can't pay sisu?

Sisu aren't the club apparently, and will be gone once a new stadium is built we are told.

 

[skybluetony176]

If sisu can't pay sisu?

We went into administration last time that happened didn't we?

 

[Godiva]

Wasps are tenants with a long lease and of a stadium in Coventry. Whether we are friends or not, we can look at their experience to get an idea of what a stadium in Coventry can generate.

Not really. A new CCFC stadium won't be anything like the Ricoh, so comparison is waste of time.
What we really need is to see Fishers Excel sheet with his projections.