Positive News for the Academy - Wasps pull out of Higgs (1 Viewer)

Captain Dart

Well-Known Member
What evidence is there that Richardson has the money to pump back into Wasps? Presumably he got the 10m from the bond financing for a reason (e.g., to settle debts elsewhere in his portfolio) which means that Richardson no longer has 10 million to pump back into Wasps.

I agree with OSB that there is a possibility of refinancing but it's not a definite. Investors are going to want to see evidence of improved financial performance or else the interest rate is going to be very high to cover the risks of such a high risk loan.

Personally I suspect Wasps are in trouble ... whether that manifests in their failure before 2022 or after 2022 remains to be seen. A lot will depend what happens on the pitch because if they continue to slide down the table I can't see the fair-weather supporters and sponsors continuing to back them.

Wishful thinking based on... no definite evidence. Lets' see what the results they should have published say when they come out.
I think if it was common knowledge they were in the doo-doos their bond price will fall sharply, but it is still trading at £1.04 (4% above offer price ex-dividend).
 

fernandopartridge

Well-Known Member
Read OSB's posts in Wasps sub forum, he identifies alternative sources of refinancing they could use.
Wasps current finances & hope
He speculates about potentially being able to borrow based on the value of the lease to be fair. He also caveats his comments that he doesn't know how well they're doing financially. If they're just hear to borrow make enough to repay external borrowers, what's the point for Richardson? No profit?

Sent from my SM-G935F using Tapatalk
 

Hobo

Well-Known Member
Looking at the pictures I think they counted everyone twice!

I must admit I had a quick squint at the ticketing site and the seating plan before the game and sold seats seemed very sparse.
 

Hobo

Well-Known Member
I would guess more than half the gate was free tickets dished out.

Surely free tickets would be shown as booked and would have been blocked off? The booked seats were very random and sparse..
 

CCFC54321

Well-Known Member
Surely free tickets would be shown as booked and would have been blocked off? The booked seats were very random and sparse..
You could be right but there’s a bloody hell of a lot of tickets being dished out which is inflating there crowd. I don’t care less what they do but there comes a time when it just doesn’t work as the people going up there will be expecting a freebie and will never purchase one. Under 10s free as well comes into the equation.

They simply cannot be making a lot of money with the amount of games they play unless there players are on £500 a week.
 

Hobo

Well-Known Member
There was certainly a high volume of free tickets last year, there had to be. I don't dispute that there are free tickets this year, just like city give away some free tickets.

But my rugby sources are saying there are not the numbers of free tickets this year..In fact quite a few disgruntled people (not sure why you either want to go or you don't).
 

CCFC54321

Well-Known Member
There is no way on gods earth that they had 16,000 paying customers vs Newcastle when there gate v Newcastle a couple of weeks before was 7,000.
 

Hobo

Well-Known Member
There is no way on gods earth that they had 16,000 paying customers vs Newcastle when there gate v Newcastle a couple of weeks before was 7,000.

I don't dispute that. But rugby fans at local clubs also state free tickets aren't so easy to come by. Also local rugby clubs potentially make money from selling Wasps tickets (not giving them away). So are Wasps targeting new markets with their free tickets?
 
Those attendances are probably correct. One game was a league match the other was a cup game similar to a Checkatrade Trophy match
 

chiefdave

Well-Known Member
Those attendances are probably correct. One game was a league match the other was a cup game similar to a Checkatrade Trophy match
Just had a look on twitter at some photos from their match at the weekend. No way the Ricoh is anything like half full.
 

ceetee

Well-Known Member
Perhaps they count the tickets they give away whether they turn up or not, after all they can't sell them - just like all clubs do with STs
 

ccfcchris

Well-Known Member
Do you think that is good, bad or average?
To be honest I don't know but would guess and it's only a guess if free tickets have been given out etc it's not great. I'm trying to find out each game just hoping there's a downward trend.
 

Hobo

Well-Known Member
To be honest I don't know but would guess and it's only a guess if free tickets have been given out etc it's not great. I'm trying to find out each game just hoping there's a downward trend.

Despite what others are saying there are not as many free tickets available this year compared to last. Their gates are down but so has their form been down. Even with free tickets, there is a chance of revenue through beverages....however not sure how much they make on that with the Compass contract? They will also be making far more from tv revenue than us. Although it sounds like they have cocked up on some of their sponsorship deals. Also remember local rugby teams benefit more from ticket sales than handing out freebies.

It was never going to be plain sailing and I would have thought they would have expected a 3 to 4 year period of transition (normal for a new business to get established and that's what it is moving a community based team). Time will tell but I think it is too soon to say they are failing. So I would prefer to see SISU being more proactive in securing our own future and revenue streams.
 

NorthernWisdom

Well-Known Member
Time will tell but I think it is too soon to say they are failing.
I'd agree.

I'd also say it's too soon to say they're succeeding too, however.

Only a madman would have moved the club and expected it to work straight out. The issue will be how elastic those fans are or not, and if they can get some leverage out of the Arena in a general sense, and get it performing better than it has been up to now.
 

fernandopartridge

Well-Known Member
I'd agree.

I'd also say it's too soon to say they're succeeding too, however.

Only a madman would have moved the club and expected it to work straight out. The issue will be how elastic those fans are or not, and if they can get some leverage out of the Arena in a general sense, and get it performing better than it has been up to now.

They're more plastic than elastic I'd say.

I'll see it again, the Ricoh will never be the day out they'd like it to be, it's poorly accessed with limited nearby amenity.
 

NorthernWisdom

Well-Known Member
They're more plastic than elastic I'd say.

I'll see it again, the Ricoh will never be the day out they'd like it to be, it's poorly accessed with limited nearby amenity.
Isn't that the issue with an awful, awful lot of new grounds? They end up surrounded by a fast food joint, a chain restaurant, and a supermarket or two... and not a lot else!
 

CCFC54321

Well-Known Member
Despite what others are saying there are not as many free tickets available this year compared to last. Their gates are down but so has their form been down. Even with free tickets, there is a chance of revenue through beverages....however not sure how much they make on that with the Compass contract? They will also be making far more from tv revenue than us. Although it sounds like they have cocked up on some of their sponsorship deals. Also remember local rugby teams benefit more from ticket sales than handing out freebies.

It was never going to be plain sailing and I would have thought they would have expected a 3 to 4 year period of transition (normal for a new business to get established and that's what it is moving a community based team). Time will tell but I think it is too soon to say they are failing. So I would prefer to see SISU being more proactive in securing our own future and revenue streams.
Good post however, if your not pulling in the crowds here in the first two or three years your knackered. It’s a bloody dangerous game Wasps are playing with there future. If the CCFC/ACL model wasn’t working on much higher gates when the Ricoh opened on circa 20k gates how the heck will Wasps do it on say 7/8k paying customers?

Also, if CRFC get promoted or even get into the top league Wasps have GONE! Bang pop!!! The floating local rugby supporters from Cov will be back up to the Butts. I pray!
 

Irish Sky Blue

Well-Known Member
My son is at Coventry University. He told me tickets to the Wasps Newcastle match were free to any student that wanted them.
 

Astute

Well-Known Member
I'd agree.

I'd also say it's too soon to say they're succeeding too, however.

Only a madman would have moved the club and expected it to work straight out. The issue will be how elastic those fans are or not, and if they can get some leverage out of the Arena in a general sense, and get it performing better than it has been up to now.
Those of us that moved away from Coventry know how much more difficult it is to go to games. First you have the expense. You either get transport if you like to have a drink or you drive. If you can afford to go each game then you have to add extra time for travelling. Every game is an away game. How many of us only do home games? How many partners allow home but not away? Family time when you work Monday to Friday?

I could go on about the difficulties. But their supporters didn't move. The club did. Suddenly things changed. The first season or two is new. Bit the longer you do it the harder it gets. Circumstances change. And if your team goes on a bad run it can be a lonely journey home. Supporters will stop going as much. Then they find other things to do. They have to be replaced.

We know how hard it is to replace supporters that stop going. And we play in our own city. I can't see how things will improve for them. They were a top club when they arrived. I have no idea how they are doing other than what I read on here. I have no interest in them at all. But it doesn't sound good.

Yes we should have our own plans. But that is a different matter. It is a waiting game. And the longer we wait the better it looks for us. I do feel sorry for their supporters from London though. Look at us when we only went as far as Northampton.
 

oldskyblue58

CCFC Finance Director
Just a few thoughts and facts based on a brief bit of internet research. Not justifying Wasps or them being here. Just think some hard facts would be useful and not some of the claims being made here. We need to understand what is going on not guess and hope. We need to know or at least make informed judgements of what we are dealing with not guess or make things up, because unless we do know finding solutions for CCFC are not going to happen. Most of the below is published and available if you care to look

Sports income in the last Wasps audited accounts 31/05/16 £12.3m out of a total turnover of £31m

The following six months to 31/12/2016 showed sports income £8.4m out of £17m total turnover

The annual central distribution for rugby from Aviva Prem. and RFU (not dependent on crowd attendances) is between £5m -£6m ................. that alone is bigger than CCFC's current total turnover

They obviously have some ( a lot) of paying customers.

Wasps Average attendances 2015 - 11401, 2016 - 16916, & 2017- 21305.

So far this season average attendance is 14722 with big games to come eg. Leicester. I haven't checked what the attendances for the first four games last season were so I am not making the leap of saying attendances are down by 33%. If you compare like for like teams it is down 19% largely due to the Bath game being in the xmas holiday period last year. (CCFC average league attendance 2016/17 9118 currently 7791 a fall of 15%)

Exeter won the Aviva Premier league last year on attendances of 12526

I understand there was a ticket price increase to start this season. That could affect numbers but might not affect income

Free tickets being available doesn't mean they are used. If free tickets are used there are sales opportunities for secondary spend that an empty seat does not provide

It is misleading to point to the first Newcastle game and attendance of 7000 as evidence of crisis it was a cup game equivalent to for example CCFC vs Shrewsbury in the Checkatrade where the CCFC attendance was 1968

F&B spend per head for Rugby is 2015 - £4.97 2016 - £5.81 half year to 31/12/2016 £6.32. That means in 2017 with crowds of 234630 in total for league games, the F&B income could be around £1.48m. Apparently for CCFC games the football club share of net profit which is split 50:50 with Wasps is 15K (that means Wasps also profit by 15k from CCFC games). It has been suggested in the past that football supporter spend per head was under £2

That would mean for every 1000 tickets that wasps give away free they earn £6320, rather than have an empty seat earning nothing

Currently Wasps are 6th in table following disappointing they would say start to the season, which included a large number of injuries apparently. They have brought in a couple of players this season and made a big signing for next season already.

Wasps are not dependent on attendances outright like CCFC or many other sports teams. Sports income is under 50% of the turnover. Falling gates of 20% would have around a 4% decrease on total turnover based on the 2016 audited accounts after excluding the guaranteed central funding. Not good but not disastrous

What hurts Wasps is the wage bill, but they control that. However it seems to be a higher cost than other Rugby clubs - a large part of the reason could be the other employees required to run the non sport side of the group, other clubs do not have the same requirement or set up. Having lost two senior people and not replaced them that could have saved at least £400k pa

The biggest risk is the EBITDA covenant in the bond, followed by having the available cash flow to pay the interest on the bond. So far no evidence of default on either

Comparing ACL/CCFC to now is like comparing chalk with cheese. In 2008 ACL group total turnover was £7.3m including the £1.3m rent paid by CCFC. Turnover for the ACL based part of the business in 2016 was £18m including a rent from CCFC of £100k

It is going to take massive investment for CRFC to get in to the Premiership. Currently their ground would not be up to it for instance. Has Sharp access to the funding necessary on and off the pitch?. Having had family playing connections with CRFC I really hope they succeed but it is going to be far from easy.

Highly likely that if both teams are in Rugby Premiership they would play at home on alternate weekends but certainly different days. A derby match between the two would also create huge local interest adding to attendances and income of both teams.

Final thought if Rugby grows in the City of Coventry and CRFC get to the Aviva Premiership which club will get squeezed out ? Wasps or CCFC? People only have so much money to spend and Rugby is not tribal like football. Unless CCFC is successful and backed financially then they could be the one at risk couldn't they...................

Wasps about to go POP .............. I don't think so at all. Do they have risks attached to their business yes definitely. Do I get the impression turnover may dip this year - yes but that's a guess. On the other side of that it may also mean less is spent so costs dip too. Is it all plain sailing for them ? - No. Can CCFC afford to wait for Wasps to go bust ......... I don't think so, get stuck in L2 and they will have problems given the owners don't seem to want to invest and there are no other options to raise capital other than player sales

I agree with NW too early in the project to say which way it is all heading. I do not see imminent disaster from what is evidenced. Sorry to deflate the Wasps crisis balloon a little
 
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peeler

Well-Known Member
Very objective posting Mr oddskyblue58, some on here are so overwhelm with hate they cling on to the slightest negative.

For those who think/hope that Wasps gates are reducing.....The Wasps gates are actually UP marginally, it's public information.

First Four Premiership Games:
2016-17 13,555, 12,280, 16,006 & 15,033 Total=56,874
2017-18 12,018, 15,308, 15,488 & 16,073 Total=58,887

Mind you you can't draw any conclusions, different teams, different days, different prices & the biggest gate this season was on the same day as England were playing Australia.

So in the words of Donald Trump "fake news"
 

CCFC54321

Well-Known Member
Very objective posting Mr oddskyblue58, some on here are so overwhelm with hate they cling on to the slightest negative.

For those who think/hope that Wasps gates are reducing.....The Wasps gates are actually UP marginally, it's public information.

First Four Premiership Games:
2016-17 13,555, 12,280, 16,006 & 15,033 Total=56,874
2017-18 12,018, 15,308, 15,488 & 16,073 Total=58,887

Mind you you can't draw any conclusions, different teams, different days, different prices & the biggest gate this season was on the same day as England were playing Australia.

So in the words of Donald Trump "fake news"
Sorry your missing the point. They can’t pay back the bond owners back as there there operating profit isn’t enough. You can talk about the gates but there a huge numbers of free tickets included which is dressing up the attendances.

I think the majority agree somethings around the corner for Wasps... and it’s not good.
 

Adge

Well-Known Member
Bet there will be a decent crowd for Leicester Tigers though.
 

oldskyblue58

CCFC Finance Director
Sorry your missing the point. They can’t pay back the bond owners back as there there operating profit isn’t enough. You can talk about the gates but there a huge numbers of free tickets included which is dressing up the attendances.

I think the majority agree somethings around the corner for Wasps... and it’s not good.

Sorry to be blunt but you are missing the point by hanging on to a falsehood..You are starting from the wrong premise. There never was an intention to repay the bonds from operating profit (which is the wrong term in any case)

There is no way on gods earth that the business could generate £35m surplus cash flow in 7 years. Wasps directors & owners knew that in 2015 as did the bond underwriters, the bond trustees, the finance houses, the valuers, the auditors, and any finance professional that looked at the financial data and prospectus properly. The first clue for anyone not choosing to look at the financials & prospectus is the fact that Wasps bought time to generate cash flow by setting aside £4.6m of the bond to pay the first 2 years bond interest, if they were not confident of paying the first two years interest then there was no way they were thinking of putting aside £5m per year to accumulate for 7 years £35m. The thing about all that is that the underwriters, bond trustees and auditors also needed to be sure the investment was safe, including repayment, within the risk scenario identified - if they were not sure then the bond issue would have failed because those professionals would not have backed it. Those professionals get it wrong and they could become liable for the repayment so they have an incentive to investigate and to be as sure as they can be

Had the business been capable of producing such surplus cash flow then the bond issue probably would not have been necessary in the first place. Loans could have been paid down directly, assets financed directly and left a much reduced interest charge for a short period after which there would be no charge. Had the business needed to finance things then with such surpluses banks and other lenders would have been falling over themselves to lend Wasps the money. What the bond has done is to buy time to build value and a track record for the business, from which various options for bond repayment become available. I have identified a possibility on another thread that repays in full and produces cost savings in a structured manner as a for instance.

Just because it makes a nice headline in the CT or Observer doesn't actually make it entirely accurate (not unusual). No they can not repay the bond in 2022 out of the business operating profit........ but thats the wrong term and they never intended to in the first place. To think they did have such an intention is a complete nonsense. Sometimes you have to look at the real facts and apply what is known or possible. The CT article does at least have three finance professionals that make it clear that refinance would be necessary and expected ie not repaid from cash flow.

Huge numbers of free tickets may well be available. What is the actual uptake on those free tickets - we do not know. If we do not know then we have no idea as to how they affect the attendance. Its just hopeful guesswork with a particular agenda.

Sports turnover 2015 was £9m out of a total turnover of £21.4m 2016 it was £12.3m out of a total turnover of £31m and the 6 months to 31/12/2016 it was £8.4m out of total turnover of £17m (during that 2016/17 season the average crowd increased to 21k so for the full year to 30/06/2017 not unreasonable to think total sports income perhaps touched £16m). So far this season we have no financial information but we know average crowds for the first four matches has increased year on year although in like for like fixtures they are down 19%. Extrapolating that then sports income could end up being £13m this season. There is of course an element of at least £5m that is guaranteed receipts from central distributions whether there is attendance or not. So given all these free tickets that distort attendance figures and have done ever since 2014 when they came here, where has their income come from? Even if the free tickets are taken up it doesn't mean there is no income because of the secondary spend that takes place.

You keep saying Wasps are going to go bust soon, "i am never wrong on these things" I believe was the expression somewhere on this thread. At least back it up with something other that hearsay and anecdotal assurances. I am willing to be convinced. So far i have seen no evidence produced that is not capable of at least one alternative interpretation.

Do most people think there is something bad that is close for Wasps?, i doubt it because most people, including me, haven't got a clue as to their current finances or immediate financial future or plans (short medium or long term). They might hope for it but most people have no idea of the facts and therefore the prospect of it happening. Indeed a lot of people frankly don't care

Sorry as much as people put forward hope as fact i do not see Wasps going bump any time soon, if ever. They have risks and problems to overcome definitely, same as any business, but are they terminal - I have seen no actual evidence that suggests that is the case.

In any case the more important concern for me is the effect of all that on CCFC for the next 5 years. Can CCFC afford to wait that long?
 
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Moff

Well-Known Member
Sorry as much as people put forward hope as fact i do not see Wasps going bump any time soon, if ever. They have risks and problems to overcome definitely, same as any business, but are they terminal - I have seen no actual evidence that suggests that is the case.

I am one who has suggested all is not as rosy as Wasps would like us to believe, but have never advocated that they are going bump.

Aside from what has been suggested to me from a couple of sources, the cut of one marquee player and now the cancellation of the Training ground at the Higgs suggests that things have been a little tougher than they predicted. I am led to believe they thought they would have achieved more both on the pitch and off it with paying attendees, than they have. Whether it is true or not I think the two decisions I have mentioned shows a tightening of their belt, which seems sensible business sense.

One of the biggest problems for Wasps, is also a problem within the sport for all the pro clubs, player wages. These are spiralling and a lot of Club Bosses have raised concern at the fact they are creeping up, and have been compared to 'footballer's wages.
Unfortunately Rugby clubs, unlike football clubs, don't have the riches to cover these and its beginning to lead many clubs to reign their costs in, in other areas. Unfortunately for the British clubs, French clubs don't have the financial restrictions that ours do, and so we are constantly fighting for the best players from a lesser financial position, and to be able to compete in Europe.
Couple this with players beginning to put more pressure on re the short length of their career and being fairly financially rewarded then I can see wages going up and up, and clubs beginning to suffer.
Richmond in the recent past, and London Welsh are two examples of how it can all go wrong.
 

oldskyblue58

CCFC Finance Director
I am one who has suggested all is not as rosy as Wasps would like us to believe, but have never advocated that they are going bump.

Aside from what has been suggested to me from a couple of sources, the cut of one marquee player and now the cancellation of the Training ground at the Higgs suggests that things have been a little tougher than they predicted. I am led to believe they thought they would have achieved more both on the pitch and off it with paying attendees, than they have. Whether it is true or not I think the two decisions I have mentioned shows a tightening of their belt, which seems sensible business sense.

One of the biggest problems for Wasps, is also a problem within the sport for all the pro clubs, player wages. These are spiralling and a lot of Club Bosses have raised concern at the fact they are creeping up, and have been compared to 'footballer's wages.
Unfortunately Rugby clubs, unlike football clubs, don't have the riches to cover these and its beginning to lead many clubs to reign their costs in, in other areas. Unfortunately for the British clubs, French clubs don't have the financial restrictions that ours do, and so we are constantly fighting for the best players from a lesser financial position, and to be able to compete in Europe.
Couple this with players beginning to put more pressure on re the short length of their career and being fairly financially rewarded then I can see wages going up and up, and clubs beginning to suffer.
Richmond in the recent past, and London Welsh are two examples of how it can all go wrong.

Moff..... for me that is a reasoned opinion and i agree with large parts of it. I don't think things are as rosy as they could be either. I also agree the biggest pressure is the wage bill and Wasps have a large one. They will have to look at their costs. There has been a tightening of the belt it seems to me also.

The training ground issue i am holding fire on because they haven't said they wont spend on one. Will wait to see what they put forward in the next 12 mths
 

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