ACL and the City Council announcement (3 Viewers)

kmj5000 · Jan 15, 2013

Grendel said:
It won't have any implications for jobs.

It does however raise a serious question as to how a cash strapped council that is cutting back on public services can spend £14 million of taxpayers money on a venture that to date has yielded minimum rewards

Tax payers should be concerned.

I think you've misunderstood the situation Grendel.

The council have not spent £14m and it has not invested in the ricoh. It has effectively lent ACL £14m. Instead of having funds on deposit with a financial institution such as a bank and getting a measly return, it will be getting a decent rate of interest from ACL and a return of the capital in due course! Far from being a misuse of taxpayers' money, it represents good business in my view!

sky blue john · Jan 15, 2013

The counsel today invested 14million in the stadium fact !!!!!
Some on here believe that the stadium should be handed over to Sisu for free !!!
Sisu want the stadium but don't want to pay for it, they have had ample opportunities to negotiate with the Higgs trust.
PWKH has said they have not had discussions with sisu since last summer !!!

chiefdave · Jan 15, 2013

I won't be pretend to be anything close to a financial expert but I can't help having the feeling this could be bad news for CCFC and to be frank I am far more concerned about CCFC being able to continue than I am ACL.. The first thing that occurs to me is that we are constantly told ACL, prior to these developments, had no reliance on CCFC and could let them walk away. To me that doesn't tally with today's news of a 'bail out' and the bank being concerned about decreasing value of the Ricoh without CCFC there.

I've asked before and haven't received a sensible answer but I can't work out why, if it is possible for ACL to achieve additional income streams they haven't done it already. I can't imagine having the football ground unavailable to ACL for less than 30 days a year is a major issues holding them back. It still appears to me there's a big gap in the finances without CCFC, even more so when things like the naming rights come up for renewal, can't see any way they are going to be worth much without a team playing there.

I think there's 2 outcomes here for the ACL / SISU situation, either ACL are now in a better position to lower the rent or they will now dig their heals in. the tone of the opening post in this thread would seem to indicate the later.

So say they do kick their heals in and SISU no longer see an exit strategy that has them getting a return, does anyone think they would hesitate to pull the plug? As far as we know, despite the cup runs, the club is still running at a loss, why would SISU keep funding those losses if they no longer have any chance of making a return? Some people seem to be willing that to happen with the idea that there would be a takeover but where would that takeover come from? At best I think we would be looking at administration should SISU decide enough is enough and any new owner would surely have the same issue with the rent.

I would be interested to know what happens if ACL can't meet this loan and at some point in the future end up going out of business. In a worst case scenario and SISU do pull out, causing CCFC to cease to exist does anyone truly believe the Ricoh would still be a viable business and if it isn't they won't be able to repay the loan. What contingency does the council have for that scenario to prevent the cost being passed onto the taxpayer?

cloughie · Jan 15, 2013

covcity4life said:
oh ok,makes sense

thanks

at last the penny has dropped

sky blue john · Jan 15, 2013

Jack Griffin said:
Errr... what about salaries & general running costs (physios & trainers need equipment, team strips need to be bought, programs need to be written & printed etc etc..). Mainly it is salaries though.

Its not down to incompetence then, things like mortgaging ryton, taking out loans against season tickets, paying for three managers salaries at the same time !!!!
Just a few of Sisu's priceless gems.

dongonzalos · Jan 15, 2013

The council have the Ricoh itself and the land as its security.
SISU have a risk as do CCFC.
The council and the 14 million is a secured debt.

Grendel · Jan 15, 2013

kmj5000 said:
I think you've misunderstood the situation Grendel.

The council have not spent £14m and it has not invested in the ricoh. It has effectively lent ACL £14m. Instead of having funds on deposit with a financial institution such as a bank and getting a measly return, it will be getting a decent rate of interest from ACL and a return of the capital in due course! Far from being a misuse of taxpayers' money, it represents good business in my view!

They have invested into a project purely due to the actions of the football club putting a private organisation into a cash flow crises. This investment is based purely on that. Say ACl still can't pay money and go bankrupt. What happens then?

A finance expert has raised some concerns on CWR about the ethics of this.

torchomatic · Jan 15, 2013

Today's action certainly debunks the theory that ACL can manage without the football club. It's patently obvious that they can't which is why the Council thought it was worth £14M of tax payers to shore up ACL.

dongonzalos · Jan 15, 2013

Grendel said:
They have invested into a project purely due to the actions of the football club putting a private organisation into a cash flow crises. This investment is based purely on that. Say ACl still can't pay money and go bankrupt. What happens then?

They have a completely secured loan that they are now making more money on than when the money is sitting in reserves. It is secured by the Ricoh and the land.
Not great news for CCFC or SISU but no risk for the council and for the tax payer the money is making money to be used by the council.

Mary_Mungo_Midge · Jan 15, 2013

Grendel said:
They have invested into a project purely due to the actions of the football club putting a private organisation into a cash flow crises. This investment is based purely on that. Say ACl still can't pay money and go bankrupt. What happens then?

A finance expert has raised some concerns on CWR about the ethics of this.

So what's your concern? You start talking about financial prudence,and then move onto ethics. Or are you covering all bases with a blunderbuss approach to catching a bit of everything?!?

Grendel · Jan 15, 2013

Mary_Mungo_Midge said:
So what's your concern? You start talking about financial prudence,and then move onto ethics. Or are you covering all bases with a blunderbuss approach to catching a bit of everything?!?

I'll think you'll find that's your tactic.

dongonzalos · Jan 15, 2013

torchomatic said:
Today's action certainly debunks the theory that ACL can manage without the football club. It's patently obvious that they can't which is why the Council thought it was worth £14M of tax payers to shore up ACL.

I assume it would need CCFC under its current ownership to be removed from the ricoh before we actually would know if ACL can survive without CCFC.

torchomatic · Jan 15, 2013

I agree with that. Considering that public finances are being squeezed more and more by that bastard Pickles, it's quite staggering that they can find £14M to basically save face. All this "protecting a local asset" is nonsense. They are protecting themselves. What asset is a football stadium without a football club?

skybluesteve76 said:
I work for the council, Im more concerned where this money has come from when 1000s have already lost there jobs and all our jobs are in danger?!

CCFCSteve · Jan 15, 2013

Sensible move by the council. The money is totally secured so tax payers will not lose out, if anything they will probably benefit. It also ensures the key decisions will be made by ACL (council and the trust) without interference from the lender. I presume this may have been the main sticking point when reaching an agreement with SISU. ACL would have certain covenants they would have to adhere to as part of the lend/loan facility, if these were breached there would have been pressure applied on ACL. ACL is now the sole decision maker in all this so hopefully it will mean a sensible deal will be reached (as long as SISU take a reasonably approach !!!!!)

DazzleTommyDazzle · Jan 15, 2013

Grendel said:
If I was sisu I will still not pay. Let the council close the club down. Explain that to the electorate and explain how the newly formed quango will pay the council back it's mortgage when it's main tenant has just been wound up by its chief creditor.

I can't believe you are now so glib about the tax payer. As an investment this makes the south sea bubble look a safe bet.

You may be right that will continue their "rent strike" in the hope that the council will believe that sufficient CCFC fans/voters will take SISU's side.

Personally, I think they have massively overplayed their hand, but each individual will have their own reading of the situation.

P .S . I'm assuming that it was normal Grendel exaggeration - or do you not really understand the South Sea Bubble

torchomatic · Jan 15, 2013

Obviously there was a danger that ACL could go under without the football club's rental payments, which is why the Council have saved them and thrown them a financial lifeline. If there were other income streams available to cover them then they would have been left to fend for themselves.

The council are bothered about the bricks and mortar, not the football club.

dongonzalos said:
I assume it would need CCFC under its current ownership to be removed from the ricoh before we actually would know if ACL can survive without CCFC.

DazzleTommyDazzle · Jan 15, 2013

torchomatic said:
Today's action certainly debunks the theory that ACL can manage without the football club. It's patently obvious that they can't which is why the Council thought it was worth £14M of tax payers to shore up ACL.

Torch - I think there's a big difference between having a sitting tenant around whom the arena is based who refuses to pay any rent and not having the said tenant and so being able to explore other options.

torchomatic · Jan 15, 2013

Now this I agree on. There seem to be more and more fans who are supporting their ACL rather than their football club.

DazzleTommyDazzle said:
side.

Personally, I think they have massively overplayed their hand, but each individual will have their own reading of the situation.

torchomatic · Jan 15, 2013

Ha ha! "Explore other options"?! I'd like to see them try!

DazzleTommyDazzle said:
Torch - I think there's a big difference between having a sitting tenant around whom the arena is based who refuses to pay any rent and not having the said tenant and so being able to explore other options.

oldskyblue58 · Jan 15, 2013

chiefdave

I do not believe anyone wants to see CCFC fail when it comes right down to it. There are plenty of CCFC fans at ACL, Council and Charity.

Dont think ACL said they were not reliant on CCFC i believe they said that CCFC accounts for less than 20% of their income..... they dont actually want to see CCFC fail or leave and have repeatedly said so. Can they immediately replace the net loss if CCFC went no but they are right now working to insulate themselves from such an event

The paper and radio described it as a bail out - for the council it is an investment that secures a greater return for their money but also strengthens what they are invested in. Was the bank concerned yes of course but they have been concerned ever since CCFC set up there .... the rental asset covenant/value is only as strong as the finances of the tenant there - never has been strong or even decent

Part of the reason there have been restricted income sources is for 9 months of the year CCFC has first call on the stadium....they have to the football league require that ........ that gets in the way of planning. ACL if you ask me have been reluctant to plan things in those circumstances. However that is going to change. You also have to remember that stadium events take time to set up and time to take down both within the stadium but also the car parks etc.

AS for sponsorship ....... it is there for another 8 years or so (i think) and therefore not an immediate problem...... which allows time to organise an alternative to CCFC to attract sponsors. If there is not going to be a CCFC there then alternatives must be found and perhaps marketing or tenants changed

I think ACL have pretty much compromised all they are going to. The latest deal is not bad and CCFC are better off. We would all be happy if the club got it for free but why should they. there is also a point below which ACL cant go and would then have to back their ability to get other income in

SISU still have an exit strategy ......... just wont be as lucrative as doing it with the ground. They have been getting the books and debts in order, the club is on the up on the pitch.......... just depends how much they will accept. Of course they could pull the plug but then it is a total loss and these are money people who maximise what they can get. Could someone work a deal based on a couple of million for the club and a little extra if promoted etc ...... why not SISU did

If ACL defaulted ....... I would guess that is a worry, perhaps they have insured the loan against that ? It isnt like the council would lose the asset as they own the freehold and could sell a new lease to a private investor and recoup the money that way.

NO one wants to see this end with CCFC liquidated ........ time the deal was done, the club cant really claim poverty this season........ what £1.5m for the cup runs....... sale of Keogh £1.5m sale of Bigi ? ......... the directors choose where they make payment and to who ....... wonder who has been given preference ?

It isnt good news for CCFC if you thought that the rent should be £170k (i dont know if you did) but there is a deal there that in reality both club and ACL can afford so it is an opportunity to stabilise things and move on to a better future for both sides. Some times you have to take what you can get not what you demand

dongonzalos · Jan 15, 2013

torchomatic said:
Obviously there was a danger that ACL could go under without the football club's rental payments, which is why the Council have saved them and thrown them a financial lifeline. If there were other income streams available to cover them then they would have been left to fend for themselves.

The council are bothered about the bricks and mortar, not the football club.

I understand your point.

However I would imagine if ACL were to truly see if they could survive in the Ricoh without SISU and CCFC.

I think you would only know that if the club were not there.

As at the moment they are the primary purpose if the stadium.

So ACL would need to evict coventry or wind them up.
Then see if the can attract a new football club

Or find a different purpose for the facility.

Grendel · Jan 15, 2013

torchomatic said:
Ha ha! "Explore other options"?! I'd like to see them try!

Perhaps they can tap into the brain of councillor mutton. I am sure he can assist in drumming up some new clients.

GaryPendrysEyes · Jan 15, 2013

Coventry Council [who are accountable to the people of Coventry] have unanimously taken this decision because they see a threat to the future of the Ricoh [a key Coventry asset] caused by the unprofessional and downright illegal actions of Sisu [a 3rd rate hedge fund, with no interest in Coventry]. The have decided to clearly support ACL/Higgs Trust [a Coventry charity of 30 years].

Time we all back Coventry, for the future of the Ricoh and the club.

DazzleTommyDazzle · Jan 15, 2013

torchomatic said:
Now this I agree on. There seem to be more and more fans who are supporting their ACL rather than their football club.

I've no idea if the balance is shifting, but in my case my concern has come from a distrust of SISU's motives.

As a general proposition I would love the club to own the stadium, but as things stand I would have significant concerns that SISU would not be motivated to act in the club's interest.

ilikesisuhatethecouncil · Jan 15, 2013

i love sisu

DazzleTommyDazzle · Jan 15, 2013

torchomatic said:
Ha ha! "Explore other options"?! I'd like to see them try!

Would you?

I'd prefer us to carry on playing there.

Jack Griffin · Jan 15, 2013

torchomatic said:
Today's action certainly debunks the theory that ACL can manage without the football club. It's patently obvious that they can't which is why the Council thought it was worth £14M of tax payers to shore up ACL.

Yes, that is a good point, but I think the shortfall is not critical now, even if the club moves elsewhere (and I don't believe SISU have a viable strategy that includes that option) then I'd have thought the matchday shortfall can be made up from a few Rugby Matches and Concerts etc.. the critical thing is that now SISU do not hold a trump card.

dongonzalos · Jan 15, 2013

DazzleTommyDazzle said:
I've no idea if the balance is shifting, but in my case my concern has come from a distrust of SISU's motives.

As a general proposition I would love the club to own the stadium, but as things stand I would have significant concerns that SISU would not be motivated to act in the club's interest.

Unfortunately there is a massive mistrust of SISU.

They started to change that this season simply by signing 9 free transfers and one nominal fee.

They then appointed a manager who has become very popular.

They then started to see attendees very slowly creeping up.

If they then accepted the 400k deal or negotiated a little better for themselves. Instead of saying less than 200k or nothing.

This would have increased their popularity dramatically.

They could have said we have got the rent down by 70% and secured an income stream for the benefit of the club.

On top of everything else fans would begin to trust.

However greed and aggressive tactics is the route they chose.

It leaves people with mistrust and uncertainty

torchomatic · Jan 15, 2013

No, obviously not. I was being flippant. There are no other options for a football stadium. Today;s action has shown that we are the stadium's cash cow.

DazzleTommyDazzle said:
Would you?

I'd prefer us to carry on playing there.

dongonzalos · Jan 15, 2013

DazzleTommyDazzle said:
Would you?

I'd prefer us to carry on playing there.

i would prefer us to be playing at the Ricoh.

I think now SISU will have to actually engage in mutual beneficial conversations and actually attempt to do a deal with ACL. As oppose to ignoring them and saying less than 200k or nothing.

I think this will lead to a quicker rent deal getting done

oldskyblue58 · Jan 15, 2013

torchomatic said:
Today's action certainly debunks the theory that ACL can manage without the football club. It's patently obvious that they can't which is why the Council thought it was worth £14M of tax payers to shore up ACL.

Does it ? ...... or does it say that ACL is vulnerable to a football club and its owners that pay nothing at all since March 2012

Seems to me these events have had the effect of forcing ACL and its stakeholders into considering their structure and how ACL operates. Forced them to take action to insulate themselves from the football club entirely - is that such a good thing for CCFC and its future? Somehow doubt CCFC will be able to play these cards again.

It will save CCFC rent but somehow I think the club has lost other things by this dispute

torchomatic · Jan 15, 2013

I don't believe for one minute that CCFC only account for 20% of ACL's income. If that was the case then we wouldn't be where we are today.

oldskyblue58 said:
chiefdave

I do not believe anyone wants to see CCFC fail when it comes right down to it. There are plenty of CCFC fans at ACL, Council and Charity.

Dont think ACL said they were not reliant on CCFC i believe they said that CCFC accounts for less than 20% of their income..... they dont actually want to see CCFC fail or leave and have repeatedly said so. Can they immediately replace the net loss if CCFC went no but they are right now working to insulate themselves from such an event

dongonzalos · Jan 15, 2013

oldskyblue58 said:
Does it ? ...... or does it say that ACL is vulnerable to a football club and its owners that pay nothing at all since March 2012

Seems to me these events have had the effect of forcing ACL and its stakeholders into considering their structure and how ACL operates. Forced them to take action to insulate themselves from the football club entirely - is that such a good thing for CCFC and its future? Somehow doubt CCFC will be able to play these cards again.

Agree at the moment they have a tenant there paying nothing.
You can only see if they can survive without that tenant when they are gone.

torchomatic · Jan 15, 2013

Which ever way you try and spin, it's the same difference. ACL need the club as much as the club need the stadium.

oldskyblue58 said:
Does it ? ...... or does it say that ACL is vulnerable to a football club and its owners that pay nothing at all since March 2012

torchomatic · Jan 15, 2013

Which ever way you try and spin, it's the same difference. ACL need the club as much as the club need the stadium.

oldskyblue58 said:
Does it ? ...... or does it say that ACL is vulnerable to a football club and its owners that pay nothing at all since March 2012

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