Butts Park Arena is new home (1 Viewer)

[italiahorse]

I think that's the point Italia and Mart have missed. It's OK saying "it's not a freehold" when well...a lease of 250 years...is effectively just that.

Anyone but SISU, eh?

No, you miss the point.
If Wasps fail the debt goes with them and the freehold remains with CCC.

 

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[Grendel]

No, you miss the point.
If Wasps fail the debt goes with them and the freehold remains with CCC.

There is no evidence they asked for the freehold and not a long lease but more importantly the freehold is utterly worthless.

 

[italiahorse]

But who has said that they preferred Wasps than SISU to have it?

I would have preferred neither to have it. CCC should have kept it until it was safe for our club to have it.

That would stop all investment in the area dead in the water.
Effectively what you are saying is wait for Sisu.
In that respect CCC have made the difficult, but right, decision and Sisu have set our club back 10 years.

 

[torchomatic]

But surely, they aren't going to fail as they are the richest rugby club in the world and a wonderfully managed business...so...they have in effect a 250 year freehold, don't they?

No, you miss the point.
If Wasps fail the debt goes with them and the freehold remains with CCC.

 

[italiahorse]

There is no evidence they asked for the freehold and not a long lease but more importantly the freehold is utterly worthless.

So Seppalla never said she wanted the freehold unencumbered ?

 

[Moff]

Wasps went for the lease - not the freehold. Wasps played soft ball. SISU played hard ball.

They went for what was on offer. It wasnt soft ball. Thats what was on offer, thats what they wanted, well with a lovely 250 year length.

 

[italiahorse]

But surely, they aren't going to fail as they are the richest rugby club in the world and a wonderfully managed business...so...they have in effect a 250 year freehold, don't they?

..... And if that's the case it proves what a good decision for the 300,00 Coventry tax payers it was, even though it is a bad decision for us 10,000 dedicated CCFC supporters.

 

[Moff]

Who in their right mind would allow Sisu to have a foothold in the Arena ?
An unscrupulous hedge fund that used 'our' football team in an attempt to get the Ricoh freehold.
If CCFC had 'any' different owner we would be established at the Ricoh now.

Unscrupulous hedge fund, is that Wasps or SISU? No great difference.

No one knows if SISU had got the ground whether they would have kept it, or sold it with the club. I think the latter but we will never know as anyone but SISU. Thats worked out well for CCFC.

 

[italiahorse]

Unscrupulous hedge fund, is that Wasps or SISU? No great difference.

No one knows if SISU had got the ground whether they would have kept it, or sold it with the club. I think the latter but we will never know as anyone but SISU. Thats worked out well for CCFC.

CCC could not take the risk.
A big risk if you based it on their previous dealings with Sisu.
Sisu miscalculated big time and people need to accept that.

 

[Grendel]

So Seppalla never said she wanted the freehold unencumbered ?

There is a letter to Lucas stating the offer in 2012 was for a 125 year lease which to my knowledge has never been challenged as inaccurate.

 

[skybluetony176]

Did it come out of the ethics meeting that SISU were happy with a 125 year lease and didn't insist on the freehold?

So what you're saying is then that SISU had no reason not to make a bid after being publicly invited to do so and the council leader went all the way to London to hear it. Why didn't they make a bid then? The ethics meeting as you point out shows that there was a basis for a deal that both parties were willing to work with so why no bid? Are we to believe that SISU couldn't raise the investment? Can there be another reason?

 

[torchomatic]

Yep, the "unencumbered" line thrown about by Mart and Italia came later. 2012 was Mutton's year of "anyone but SISU". Mart et al can spin it anyway they want though; we were never offered what Wasps were.

There is a letter to Lucas stating the offer in 2012 was for a 125 year lease which to my knowledge has never been challenged as inaccurate.

 

[torchomatic]

Here comes the Calvary.

So what you're saying is then that SISU had no reason not to make a bid after being publicly invited to do so and the council leader went all the way to London to hear it. Why didn't they make a bid then? The ethics meeting as you point out shows that there was a basis for a deal that both parties were willing to work with so why no bid? Are we to believe that SISU couldn't raise the investment? Can there be another reason?

 

[italiahorse]

There is a letter to Lucas stating the offer in 2012 was for a 125 year lease which to my knowledge has never been challenged as inaccurate.

Or seen ?
Once they took us to Northampton she upped the stakes.

 

[chiefdave]

If Wasps fail the debt goes with them and the freehold remains with CCC.

Not as simple as that.

Under the terms of the head lease granted by Coventry City Council (“CCC”) to Arena Coventry (2006) Limited (“ACL2006”) in respect of the Arena (the “Head Lease”), CCC have reserved the right to forfeit the Head Lease if ACL2006 becomes insolvent. Insolvency in this scenario means a situation where ACL2006 becomes unable to pay its debts, has a receiver/administrator/provisional liquidator appointed over its assets, has assets seized in order to pay debts of ACL2006 or has a winding-up order made against it. The effect of forfeiture would be that the 250 year Head Lease would fall away and that ACL would then become the tenant of CCC at the Arena for the remaining 38 years of its existing lease. However, the right of CCC to claim forfeiture of the Head Lease is not an automatic right. If CCC made a claim for such forfeiture, this could be contested by ACL2006, any third party that held security over ACL2006 and any subtenants of ACL2006 by making application to a court in England. Further, if an administrator was to be appointed over the assets of ACL2006, then CCC would not be able to forfeit the Head Lease without the consent of the appointed administrator or with the leave of the courts.
If forfeiture was to take place prior to maturity of the Bonds, then U.S. Bank Trustees Limited, the entity that will hold the security on behalf of Bondholders, may not be in a position to assign the Head Lease for value in the event CCC forfeited the lease as described in the preceding paragraph. This may have an impact on the Bondholders’ ability to receive full repayment of their investment in the Bonds on the occurrence of such an insolvency event.

 

[Moff]

CCC could not take the risk.
A big risk if you based it on their previous dealings with Sisu.
Sisu miscalculated big time and people need to accept that.

Why couldnt CCC take the risk? What was the risk?

 

[skybluetony176]

So, you finally admit the Council screwed a club established in the city for 130 years for a franchise because they didn't like SISU? They couldn't have waited a bit longer for a change of ownership? They were forced to give that Franchise a 250 lease, were they? SISU asked for half of that and were turned down.

When were SISU turned down?

 

[chiefdave]

So what you're saying is then that SISU had no reason not to make a bid

No what I'm saying is that people keep parroting the unencumbered line when there is evidence to suggest that was not a requirement.

 

[Moff]

When were SISU turned down?

Well this is confusing. You are saying SISU werent turned down, but yet Italia says CCC wouldnt sell to SISU as too much risk, which is being turned down. So which of you two is correct?

 

[torchomatic]

Both apparently.

Well this is confusing. You are saying SISU werent turned down, but yet Italia says CCC wouldnt sell to SISU as too much risk, which is being turned down. So which of you two is correct?

 

[Hobo]

The only important fact is we haven't got our own stadium and there is no sign of us getting one in the near future.

you can rake the ashes as much as you like...it changes nothing.

 

[skybluetony176]

There is a letter to Lucas stating the offer in 2012 was for a 125 year lease which to my knowledge has never been challenged as inaccurate.

SISU do have a history of changing their mind you know. Here's a quote from former CCFC executive after the AL, JS meeting in London.

“Joy’s door is open to Ann for further discussions. But we would have to be clear this time that it would be a discussion about stadium ownership.”

 

[skybluetony176]

Here comes the Calvary.

If you don't want to answer the question (and why would you, the only honest answer contradicts your argument) it's probably better to say nothing at all.

 

[SkyBlueZack]

Isn't that essentially what Wasps did? Used the dispute between SISU and CCC, with SISU using CCFC. Took advantage of the situation. Long as it made 'business' sense?

 

[Moff]

The only important fact is we haven't got our own stadium and there is no sign of us getting one in the near future.

you can rake the ashes as much as you like...it changes nothing.

I think everyone knows the first point. Its just some people like to rake some dont. Some rake one way. Some another.

 

[torchomatic]

Both sides do:

"I don't think we will be able to help while there is a hedge fund involved.
They won't sell even though there has been interest, because no one will pay the money they want to offset their losses. That's their own fault, there is no sympathy from local people. We won't consider selling our shares to Sisu. If we had a company we thought would take it forward we might."

“Joy’s door is open to Ann for further discussions. But we would have to be clear this time that it would be a discussion about stadium ownership.”

 

[skybluetony176]

No what I'm saying is that people keep parroting the unencumbered line when there is evidence to suggest that was not a requirement.

I wasn't talking about the unencumbered freehold. I was asking about a leasehold and the lack of a bid for one despite SISU willing to apparently take one. So why no bid? She had the council leader in front of her in her own office and didn't make a bid. Why not? As you've pointed out yourself there was the basis for a deal but they never ever tabled a bid. Why not?

 

[oldskyblue58]

Zack First off this is going to be all conjecture and guesswork. I haven't seen their business plan or SISU's

In reverse order..... no idea at all why 50 years, to my mind it is one of the things CCC got wrong. Should have been say 125 years then ACL could have given CCFC a 99 year lease ..... in my simple mind that would have created worth in both businesses

Deals change, especially when new owners come in. What they have done is to extend the deal term and that gives stability. Compass is a 24% shareholder in IEC (subsidiary of ACL) in any case so have a stake in the arena. Might not even be cheaper but it might be more stable. Compass is a huge company (employs of 60,000 in UK) and it might be agreement to manage cashflow for all I know. But it ties in a key supplier that reduces risk

The concerts was an example of bringing in other incomes, nothing more. The Arena had stopped doing such events. that concert is only part of an entertainment plan and puts the Arena back on the map for bands etc I assume with the intention of snowballing the acts they can get each year. What it means is that when it is the closed season then there is income still coming in, reduces the cash flow risk. I think they stopped doing the events because of two factors, didn't have the staff and more importantly the cash flow to set up and incentivise such events in the first place

The shareholders in ACL I don't think ever had the intention of being there long term. They are simply not equipped to maximise such things. Then they got caught up in something they didn't want but couldn't get out of at a value that met their needs. The idea was originally that CCFC would quickly buy in to the Arena and take it forward. Sadly the football club was a basket case financially and never could provide a sensible business case that safeguarded the football team but also the Arena. Yes the rent was too high but the correlation there I think is that it was to begin with the only major source of income for a company that had to pay out 1.7m in loan payments from the get go. The stakeholders were supposed to get out sooner rather than later and the rent could be addressed then..... events over took that intention to become a heels dug in acrid dispute How a 50 year lease was valued at £21m I don't know. The whole set up was wrong and yes it was CCC fault but also those in charge of CCFC at the time share some of the blame

For the life of me I have no idea why SISU didn't challenge the lease or rent when they bought in. To my mind that's just basics. Distressed business ........ so whats being paid out, what are the incomes, what can we afford, we want a better deal............ are all simple basic questions are they not, especially for people who specialise in such acquisitions

From what I understand had CCFC been undertaking operations as they are now (ie living within means) then we may well be in a better position now in terms of ownership of club and arena. Maybe we would have been relegated sooner but there is an argument to say we would have come back much stronger. Sadly reality got in the way of dreams. That may never have happened but was certainly never going to happen with the aggression shown by both sides

The one thing that the dispute did do was to make ACL look outside of the football business. To sharpen up their act business wise. To spread the risk from being reliant on one sporting tenant. To be fair to them they did that and to a reasonable degree succeeded. But they could never get the cash flow right, largely because of the dispute, to take it further. The Charity and Council simply didn't have the money to take it on further but they did make the other side of the business more attractive. That made others interested. The site needed extensive refurbishment and there was no money. One of the biggest reasons the CCC & AEHC sold out. I know people see it as a white elephant etc and assume that nothing is going on if football or now rugby are not drawing the crowds but it isn't the case hasn't been for the last few years. They have diversified and spread the risk. Wasps have taken that process further

Try getting a ticket for their Christmas party programme. There are 6 events of at least 1500 people at £50 per ticket that's £450k before any drinks have been bought and the Ricoh isn't the cheapest place for a pint or a bottle of wine. Yes they had these events before but I think you will find there are more such events now under the present owners. They are driving that side of the business because it supports the playing side and reduces the risk brought by professional sport

The biggest risk to ACL that diversifying the whole thing solved is that they are no longer reliant of CCFC's income or for that matter Wasps RFC. The turnover to 30/06/2015 was 21.4m CCFC paid rent £100k plus some F&B. Sadly and annoyingly it meant we lost out on the stadium and importantly vital income.

Just a personal opinion but a lot more of partnership rather than confrontation would have gone a long way over the past 7 years from all sides as would more transparency ....... probably wouldn't be sitting with Wasps here now. Both sides as bad as each other, both sides appear to me to have been "negotiating in good faith" with a plan B or was it A running in the background. Interesting to see what plan started when

As I say just my interpretation. Others may see it differently - I have no problem with that

 

[skybluetony176]

Well this is confusing. You are saying SISU werent turned down, but yet Italia says CCC wouldnt sell to SISU as too much risk, which is being turned down. So which of you two is correct?

I'm not talking for Italia I'm talking for myself. Torch has made a statement and I've asked him for clarity.

 

[italiahorse]

Well this is confusing. You are saying SISU werent turned down, but yet Italia says CCC wouldnt sell to SISU as too much risk, which is being turned down. So which of you two is correct?

They never made an offer so were never turned down .
I never said they were turned down but CCC would have considered the risk associated with any potential offer that Sisu made when selling to Wasps

 

[torchomatic]

August 2012.

When were SISU turned down?

 

[skybluetony176]

Both sides do:

"I don't think we will be able to help while there is a hedge fund involved.
They won't sell even though there has been interest, because no one will pay the money they want to offset their losses. That's their own fault, there is no sympathy from local people. We won't consider selling our shares to Sisu. If we had a company we thought would take it forward we might."

And I didn't say otherwise. But to suggest that SISU never talked about only wanting stadium ownership (freehold, unencumbered or otherwise) is BS.

 

[chiefdave]

I wasn't talking about the unencumbered freehold. I was asking about a leasehold and the lack of a bid for one despite SISU willing to apparently take one. So why no bid? She had the council leader in front of her in her own office and didn't make a bid. Why not? As you've pointed out yourself there was the basis for a deal but they never ever tabled a bid. Why not?

You would have to be privvy to the conversation that took place to know that. I would suspect that, as with many things, before a formal bid is tabled an informal agreement would be made.

If the meeting went something like:
Joy "We'll give you £3m for your 50% but we want the lease extended to 125 years"
Anne "No chance, we aren't selling to you"
why would that then be followed up with a formal bid? The lack of a bid can just as easily be taken as evidence that SISU knew there was no chance of a purchase as it can to form part of any other narrative.

 

[Hobo]

I think everyone knows the first point. Its just some people like to rake some dont. Some rake one way. Some another.

And which ever way you rake it makes no difference

 

[torchomatic]

Didn't the JR documents state something about there being a "commercial compromise" around SISU taking on the Stadium and all seemed fine and dandy but CCC were at the same time planning the propping up of ACL which happened in the January?

You would have to be privvy to the conversation that took place to know that. I would suspect that, as with many things, before a formal bid is tabled an informal agreement would be made.

If the meeting went something like:
Joy "We'll give you £3m for your 50% but we want the lease extended to 125 years"
Anne "No chance, we aren't selling to you"
why would that then be followed up with a formal bid? The lack of a bid can just as easily be taken as evidence that SISU knew there was no chance of a purchase as it can to form part of any other narrative.