torchomatic
Well-Known Member
Doubt it. I wonder who "they" are?Did they really say that?
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Butts Park Arena is new home (6 Viewers)
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Flying Fokker
Well-Known Member
With regard the Wasps not wanting us there. Of course, it is hearsay and speculation, borne out of concern for the club.
My source may be wrong. But the court case is the problem. It was unwelcome and gave a warning sign that SISU cannot be partners in any venture (in their current format). The same source told me that Wasps were coming to Coventry and you may remember that I posted what he passed on to me. He has a friend high up at a well known sponsor of Wasps.
As for whether Wasps need the money, they may do a deal with the devil in the short term of course.
My source may be wrong. But the court case is the problem. It was unwelcome and gave a warning sign that SISU cannot be partners in any venture (in their current format). The same source told me that Wasps were coming to Coventry and you may remember that I posted what he passed on to me. He has a friend high up at a well known sponsor of Wasps.
As for whether Wasps need the money, they may do a deal with the devil in the short term of course.
Astute
Well-Known Member
The only problem is that they need to make a lot of money. Over 2m a year before they even take their normal running costs into consideration. So they will need to get as much out of us as they can get.
And then they have to raise another 5m a year for the next 7 years to pay the bonds back. So how are they going to raise over 7m a year before their normal running costs?
This is why I didn't want SISU to have done the same but am glad that Wasps have done it. It just means that we could have a few more rough years ahead of us. And none of us have much of an idea which way it will go.
Astute
Well-Known Member
The Ricoh is theirs. But it isn't theirs to sell as it is held as equity in the name of the bond holders until they are paid up. That is maybe unless any money received goes to the bond holders. And they would have to agree to it.
Nick
Administrator
Isn't the court case against the council?
skybluetony176
Well-Known Member
Yes Southampton had the second biggest wage bill in the league (£29m) and Bournemouth spent £15m getting out of league one, £10.5m in their first season in the championship and I'm sure when finances are released they will have spent c£15m last season in their promotion season - that's c£40m in 3 years from a sugar daddy.
Don't worry though we will have no problem in getting promotion with little access to revenues, one of the lowest turnovers in the championship, and an owner who isn't a sugar daddy.
And this talk of shared ownership is forgetting wasps (Not ACL) are using it as £42m security. Selling half of the Ricoh to the football club will impact on the security of the bonds. OSB has made several posts reasoning why wasps won't sell shares, won't buy the football club and don't particularly need the club at the Ricoh.
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Doesn't the fact that both Southampton and Bournemouth have access to 365 day a year revenue actually show what a Red Herring all the lack of access to revenues talk is? They didn't get promoted because of revenue, they got promoted because they not only had someone willing to put the money in but also were smart enough to have someone running the show who knew how to get promoted. That's the important combination revenue is a Red Herring and most on here have been sucked into it's overstated importance.
Nick
Administrator
Not really, it shows that without a sugar daddy or revenues we are worse off than those with at least revenues.
oldskyblue58
CCFC Finance Director
Please do not read this as a justification for Wasps being here - it isn't. Just my view of why some of the things suggested will not happen. It could of course be wrong.
First thing to understand is that this is not a short term plan by Wasps. It is not based on the next couple of years probably not even the next five or six (although there will be targets to be met in that time frame) It is a long term structuring of that rugby club to maximise the financial outcomes at their Coventry base. It hasn't been based only on attendances - in fact attendances are a relatively small part of it. A lot of what has been done has been about spreading the financial risk around ..... not being reliant on one person or entity or part of the business
The bond issue that Wasps did is secured on the lease and other assets of the Wasps holdings group. To sell an interest in say ACL to CCFC (be it SISU owned or not) has a number of obstacles some of which are .........
- it will cost the purchaser something
- it would weaken the security on the bonds
- any funds raised would have to be applied to paying down the bond , if the bond holder trustees agreed to the sale in the first place
- it would reduce the top line turnover of Wasps so affect their own profitability
- the remaining bonds would still be in place and therefore anyone buying in would take on that risk (unless of course 50% or less is worth 34m now and bonds paid off )
I wouldn't hang on to two things repeatedly mentioned here
- they have to repay the bonds
- attendances are not very good
Why?
Well do the bonds have to be repaid in cash? Could they just issue new bonds or even go for a full flotation on the stock market. Going to depend on what the business as a whole does in the mean time certainly but the playing side is only part of it. The bonds currently trade at a premium. The interest burden is approx. 1.2m more but does that make it unsustainable, do low crowds mean they wont be able to pay it? The fact is they have a whole lot of other income sources to maximise so they can support it - again spread the risk
So what effect will attendances have. In 2014 Wasps had an average attendance at 8846 in 2015 it was 11401. If you take from the 2015 accounts published then ticket income is 12% of turnover (2015 21.4m and 2014 6.5m) = 2.57m that is up from the previous year by 42% apparently which means that 2014 was 1.81m. I think everyone agrees that there were a lot of freebies etc in their first season at the Ricoh plus discounts etc but ticket income was still up. If attendances drop below there 10k average now it wont mean there is no turnover only less. BUT it only accounts for 12% of the total in the first place. Yes I know it feeds in to other income to an extent
From the Wasps 2015 accounts the £21.4m turnover is split
Central distributions 20% - isn't there an improved deal this season because of the BT deal?
Conference & Exhibition income 18%
Hospitality & sponsorship income 12% - no ground sponsorship yet so this must include old Ricoh one. But it doesn't mean there wont be some ground sponsorship income and other sponsorship income has increased apparently
Ticket income 12% - this is just Wasps tickets CCFC tickets goes straight to CCFC
Room Hire 8%
Hotel income 6%
Arena Rental income 5% - that equates to 1.07m of which CCFC pay approx. 100k apparently
Food & drink income 4% - that would cover Wasps games and their share of the deal with CCFC. Total £850k
Other mixed income 15% - which is not detailed but would assume would be TV money, Corporate events, merchandise etc
Footfall at the Arena in 2015 year was over 1.5m - of which sporting teams (round or oval ball) accounted for around 500k
Simply put Wasps are not just reliant on sporting attendances at the Ricoh they have spread the risk. It is a key performance indicator certainly but not the only one
Now look at that and pick out just how much CCFC contributed to 2014/2015. Yes that will be more if they get promoted and are able to hold their own to stay there. It would be even more so if CCFC got to the Premiership but sorry right now I do not see the turnover or the additional funding to do that being available, so its a pipe dream. If you don't have the turnover or the parachute payments you need to probably be financing losses of around £10m per season until you get to the promised land IMO.
Have tried to keep my opinions in this post to a minimum but look at what facts are available.
We CCFC remain between a rock and a hard place financially and that has been very well masked by the success so far on the pitch this season. However even on the pitch we haven't achieved anything yet other than making the SBA start enjoying their football again as very welcome as that is. Financing even a joint venture at the BPA is going to very difficult to achieve even if it fits on the site. Then there is the timing of things, the way things are going we might succeed on the pitch well before we succeed off it which may mean it cant be sustained and we fail again on it because we do not have finances to maintain it .......before a new ground at BPA gets off the planning desk
First thing to understand is that this is not a short term plan by Wasps. It is not based on the next couple of years probably not even the next five or six (although there will be targets to be met in that time frame) It is a long term structuring of that rugby club to maximise the financial outcomes at their Coventry base. It hasn't been based only on attendances - in fact attendances are a relatively small part of it. A lot of what has been done has been about spreading the financial risk around ..... not being reliant on one person or entity or part of the business
The bond issue that Wasps did is secured on the lease and other assets of the Wasps holdings group. To sell an interest in say ACL to CCFC (be it SISU owned or not) has a number of obstacles some of which are .........
- it will cost the purchaser something
- it would weaken the security on the bonds
- any funds raised would have to be applied to paying down the bond , if the bond holder trustees agreed to the sale in the first place
- it would reduce the top line turnover of Wasps so affect their own profitability
- the remaining bonds would still be in place and therefore anyone buying in would take on that risk (unless of course 50% or less is worth 34m now and bonds paid off )
I wouldn't hang on to two things repeatedly mentioned here
- they have to repay the bonds
- attendances are not very good
Why?
Well do the bonds have to be repaid in cash? Could they just issue new bonds or even go for a full flotation on the stock market. Going to depend on what the business as a whole does in the mean time certainly but the playing side is only part of it. The bonds currently trade at a premium. The interest burden is approx. 1.2m more but does that make it unsustainable, do low crowds mean they wont be able to pay it? The fact is they have a whole lot of other income sources to maximise so they can support it - again spread the risk
So what effect will attendances have. In 2014 Wasps had an average attendance at 8846 in 2015 it was 11401. If you take from the 2015 accounts published then ticket income is 12% of turnover (2015 21.4m and 2014 6.5m) = 2.57m that is up from the previous year by 42% apparently which means that 2014 was 1.81m. I think everyone agrees that there were a lot of freebies etc in their first season at the Ricoh plus discounts etc but ticket income was still up. If attendances drop below there 10k average now it wont mean there is no turnover only less. BUT it only accounts for 12% of the total in the first place. Yes I know it feeds in to other income to an extent
From the Wasps 2015 accounts the £21.4m turnover is split
Central distributions 20% - isn't there an improved deal this season because of the BT deal?
Conference & Exhibition income 18%
Hospitality & sponsorship income 12% - no ground sponsorship yet so this must include old Ricoh one. But it doesn't mean there wont be some ground sponsorship income and other sponsorship income has increased apparently
Ticket income 12% - this is just Wasps tickets CCFC tickets goes straight to CCFC
Room Hire 8%
Hotel income 6%
Arena Rental income 5% - that equates to 1.07m of which CCFC pay approx. 100k apparently
Food & drink income 4% - that would cover Wasps games and their share of the deal with CCFC. Total £850k
Other mixed income 15% - which is not detailed but would assume would be TV money, Corporate events, merchandise etc
Footfall at the Arena in 2015 year was over 1.5m - of which sporting teams (round or oval ball) accounted for around 500k
Simply put Wasps are not just reliant on sporting attendances at the Ricoh they have spread the risk. It is a key performance indicator certainly but not the only one
Now look at that and pick out just how much CCFC contributed to 2014/2015. Yes that will be more if they get promoted and are able to hold their own to stay there. It would be even more so if CCFC got to the Premiership but sorry right now I do not see the turnover or the additional funding to do that being available, so its a pipe dream. If you don't have the turnover or the parachute payments you need to probably be financing losses of around £10m per season until you get to the promised land IMO.
Have tried to keep my opinions in this post to a minimum but look at what facts are available.
We CCFC remain between a rock and a hard place financially and that has been very well masked by the success so far on the pitch this season. However even on the pitch we haven't achieved anything yet other than making the SBA start enjoying their football again as very welcome as that is. Financing even a joint venture at the BPA is going to very difficult to achieve even if it fits on the site. Then there is the timing of things, the way things are going we might succeed on the pitch well before we succeed off it which may mean it cant be sustained and we fail again on it because we do not have finances to maintain it .......before a new ground at BPA gets off the planning desk
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torchomatic
Well-Known Member
Why are you and others so determined to prove that our club doesn't need revenue. The way you, Italia and others talk it seems that all clubs and businesses need revenue apart from us.
Even your lot at wasps said it was vital.
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stupot07
Well-Known Member
It's not really a red herring though is it. If 365 day revenues weren't worth the effort, no club would be doing it. You check through their websites and they all are doing it.
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skybluetony176
Well-Known Member
So everyone with revenue is in less debt than us and has a larger playing budget? I'd be surprised if that turned out to be remotely anywhere near the truth.
There's a much bigger picture at play here.
skybluetony176
Well-Known Member
I'm not. I'm saying the importance of 365day a year revenue is being overstated and therefore a Red Herring. It's pretty clear that ticket revenue is king outside of the premier league surely maximizing this is the most important thing, you don't do that by building a 12-15k stadium and when in the premier league it's the TV money with ticket revenue second.
Nick
Administrator
So turnover should be in order of attendances then?
skybluetony176
Well-Known Member
It's not really a red herring though is it. If 365 day revenues weren't worth the effort, no club would be doing it. You check through their websites and they all are doing it.
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Have you never considered that the reason that they do it is because they have the costs of running a stadium 365days a year and maybe even the cost of servicing the debt created from building in the first place? Does the revenue created outside of football actually cover the costs of running the stadium in the majority of cases? How much revenue does it actually put on the playing budget? In the majority of cases does it actually add anything to the playing budget at all?
If only we had fully costed business plans to see the full picture for both renting and owning. You'd have thought that SISU would have been capable of at least doing that since they started talking about building a new stadium. In fact, you'd have thought that they'd done that before they started talking about building a new stadium in the first place. Strange that we haven't seen them. If I was being cynical I'd say that they haven't because the numbers don't add up. Well not for the club anyway, I'm sure SISU's investors will be OK. That's if I was being cynical.
skybluetony176
Well-Known Member
No. Like I've said there's a much bigger picture in play and just because a team has a bigger turnover doesn't mean that they have the same operating costs and owning and running a stadium is a large operating cost. Read post #925 so I don't repeat myself.
stupot07
Well-Known Member
But it's not just 365 day income, it's matchday income, stand sponsorship, stadium sponsorship, advertising inside and outside the ground, etc, etc.
Yes, you do have to take into account costs and yes we do need to see a business case before any decision can be made.
But you can write them off as a red herring. Because on the flip side we could use Bournemouth as a reason why a 12-15k stadium is ok, because they got to the PL in a smaller ground. And none of us think that.
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Broken Hearted Sky Blue
Well-Known Member
But it's not just 365 day income, it's matchday income, stand sponsorship, stadium sponsorship, advertising inside and outside the ground, etc, etc.
Yes, you do have to take into account costs and yes we do need to see a business case before any decision can be made.
But you can write them off as a red herring. Because on the flip side we could use Bournemouth as a reason why a 12-15k stadium is ok, because they got to the PL in a smaller ground. And none of us think that.
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Why do we need to see a business case before any decision can be made?
skybluetony176
Well-Known Member
But it's not just 365 day income, it's matchday income, stand sponsorship, stadium sponsorship, advertising inside and outside the ground, etc, etc.
Yes, you do have to take into account costs and yes we do need to see a business case before any decision can be made.
But you can write them off as a red herring. Because on the flip side we could use Bournemouth as a reason why a 12-15k stadium is ok, because they got to the PL in a smaller ground. And none of us think that.
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Agreed. As I keep saying there is a bigger picture in play. I would just point out how difficult it's been to attract a shirt sponsor or even player sponsors in the match day program over the last few years. We're hardly accomplished under SISU's watch at attracting sponsorship. Don't we get pitch side advertising revenue at the Ricoh? I thought I'd read somewhere that we do.
Even so it still come's back to how much all this advertising and sponsorship contributes to operating costs of a stadium and how much contributes to the playing budget.
Some figures would be helpful.
(edit) just to add Bournemouth are the perfect example of overstating the effect of 365day revenue. It's a sugar daddy and a good manager that spent the sugar daddies money wisely. They're there despite a lack of Ticket revenue and whatever extra revenue their limited stadium can supply.
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Captain Dart
Well-Known Member
The Swiss Ramble is a good source of Football finance information, but the analyses are usually at a higher level than League One
http://swissramble.blogspot.co.uk/2015/12/brighton-and-hove-albion-welcome-to.html
http://swissramble.blogspot.co.uk/2015/12/brighton-and-hove-albion-welcome-to.html
skybluetony176
Well-Known Member
The Swiss Ramble is a good source of Football finance information, but the analyses are usually at a higher level than League One
http://swissramble.blogspot.co.uk/2015/12/brighton-and-hove-albion-welcome-to.html
I'm guessing that the operating costs of the stadium are within the £15m "other expenses". Shame there isn't a breakdown so you can see how much of that is the cost of running the stadium.
stupot07
Well-Known Member
Why wouldn't we want to see a business case?
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Captain Dart
Well-Known Member
Dig deeper, Swiss Ramble may have more data to explore. He did a big analysis on Charlton 5 or 6 years back.
He is the international version of OSB.
Broken Hearted Sky Blue
Well-Known Member
Why wouldn't we want to see a business case?
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I'm not saying we wouldn't but if and I repeat if a new ground is going to be built do you really think that you making it a good or bad decision is going to make any difference? They will make that decision not you me or anybody else,
Nick
Administrator
It would help people make their mine up whether it is a good or bad decision though. Rather than just what the telegraph tells them it is.
Broken Hearted Sky Blue
Well-Known Member
So what would you do if you thought it was a bad idea? More importantly what would SISU do oh yes change their minds I don't think so.
Also why bring the telegraph into it? Unless you take everything the observer says as gospel. .
Nick
Administrator
Nope, I'd much rather make my own mind up by reading different things and looking to see if there is any evidence.
letsallsingtogether
Well-Known Member
Yrt you believe the shit on here that certain posters post
Nick
Administrator
What like?
Broken Hearted Sky Blue
Well-Known Member
Again what would you do or indeed what could you do if you thought it was a bad idea?
Nick
Administrator
I couldn't do anything, but at least we would have an idea rather than being completely in the dark.
Surely people would rather have more information than less?
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