10: Is there still to be an escrow account at 500k?
ACL: There is a legal requirement for an escrow account, which in essence is a rent deposit deed, agreed in 2004 by the then owners of CCFC and ACL, with funds not provided by CCFC. The deed is meant to cover any failure of the tenant, e.g. CCFC to pay their rent. It is worth reiterating the guarantee or escrow funds, were never deposited by the then owners of CCFC or SISU when they acquired CCFC. However ACL proposed as part of its 29 January 2013 agreement to reduce this amount to £200k, therefore writing off £313,000, this was conditional on agreeing the HOTs of the aforementioned date
CCFC: Yes – level to be reduced to £200k.
11: Have there been detailed discussions regarding match day income and what revenues CCFC want access to?
ACL: Yes
CCFC: Yes
12: £100,000 has been publicised as the value of food and beverage income – is this 50% of the profits i.e. ACL’s half from the EIC joint venture?
ACL: In principle – we have all accepted that more work is needed on the detail of this, and it needs to be agreed with ACL’s contracted partner Compass, so it is not simply in ACL’s gift. Of course match-day income is also influenced by attendances, these we have seen drop from an average of 13,126 in 11/12 to a current year to date average of 9,259
Match-day F&B Turnover in 11/12 season was £1,010,992, with Nett Profit of £119,903.
ACL would be willing to give CCFC full details of the F & B accounts and were prepared to go open book and even allow CCFC to use the revenue figures in the clubs FFP calculations?
CCFC: CCFC would have to negotiate with ACL partner Compass but if after 3 months Compass would not agree access to this level of revenue indicated by ACL, we would ask that the rent be reduced by £100k
13: Did any of the ACL negotiating team believe heads of terms had been agreed on 9/01/2013?
ACL: Yes absolutely and would be prepared to swear on oath to that. This meeting was almost 4 hours long with adjournments into separate rooms, both parties concluded with a verbal agreement and a commitment to formalise within 48 hours, the meeting concluded with handshakes ratifying the agreement. At a meeting on 19 January 2013, the ACL representatives commenced by asking whether those representing CCFC, Fisher, Labovitch and Clarke had the authority to agree a deal, given that up to that throughout December and up to 7 January 2013, negotiations were directly with Joy Seppala, each CCFC Director stated they were empowered and would not need to refer any decision back to Ms Seppala. This was reiterated prior to commencement of the meeting dated 29 January 2013, and once again confirmed by the 3 CCFC representatives.
CCFC: No there were still major points such as the content of a new rent agreement needing to be clarified. Any handshakes – and not everybody shook hands - were purely as a “goodbye” gesture and not as a sign of “deal agreement”.
14: Did the club sell the rights to match day catering income to ACL or were these part of the sales of the ACL shares to the Higgs Charity? How much for and when?
ACL: Yes on the sale of its shares to The Higgs Charity. CCFC sold Football Investors Ltd, the non-trading company that owns 50% of the shares in ACL, to the Higgs Charity in 2003 for £6.5m.
CCFC: The club relinquished this income to ACL but I am not aware of what it received in return
15: Are ACL, Compass or IEC expecting to be the supplier of those services to CCFC? e.g. Staffing
ACL: Compass will need to be the supplier as they are contracted. We all accepted that the detail of how this could work is still to be agreed. This will need the full agreement of Compass who are receptive to having a relationship with CCFC, subject to contract.
CCFC: As things stand the contract is with Compass but CCFC would prefer to have full control of the F & B – we need to understand exactly what arrangement is in place with Compass
16: Did the club sell the right to car park income?
ACL: No they retained 900 spaces for use on match-days, these remain part of the new overall proposed deal. This is approximately 50% of all available car parking at the stadium.
CCFC: I don’t know- I haven’t heard this
17: Did the club stop receiving car park income as a consequence of not paying the rent for the stadium?
ACL: Yes, the club subsequently purchased 300 seasonal spaces at the start of the season, which they also sell on.
CCFC: Yes
18: Is it the intention that CCFC pays for any incremental car parking spaces it may require beyond the 900 spaces CCFC has allocated under the current licence?
ACL: Yes, if the club require additional spaces beyond their contracted 900 spaces and ACL have the availability (e.g. no conflicting events), they would need to purchase them.
CCFC: No car parking offered to CCFC under proposal
19: Does the club currently receive any of the following either in part or full, directly or indirectly, and include it in their turnover?
Car parking
ACL : Under the licence agreement the club gets 900 car park spaces – nearly 50% of the total. Temporary arrangements outlined above are in place, whilst the rent is being withheld. ACL’s proposed deal would reinstate the 900.
CCFC: No car parking received
Concourse food and drinks
ACL: No
CCFC: No
Catering in Jaguar, Legends, Yorkshire, Eon etc
ACL: Hospitality food is purchased by the club and is sold on by them as part of a package
CCFC: No all has to be purchased at high rate that allows no margin for profit
Pitch side advertising
ACL: Yes. All pitch side advertising is sold by the Club. ACL purchase from the Club advertising for ACL sponsors
CCFC: Pitch side advertising belongs to the club, all other advertising is ACL’s.
Match tickets
ACL: Yes. ACL separately purchase tickets for all their guests and sponsors.
CCFC: Yes
Match day packages
ACL: Yes, however ACL have 6 hospitality boxes, which were excluded from the original lease/licence. ACL have 4 x Jaguar Club seats as part of the three way Jaguar Club agreement
CCFC: Yes
20: Has the club ever tried to repurchase the additional income sources from ACL?
ACL: No – its policy to date is to demand these for nothing.
CCFC: Last year Daniel Gidney, the then CEO of ACL offered CCFC the full match day revenue streams for a one off payment of £24 million, this was dismissed out of hand [? – I don’t think this valuation could be substantiated]
21: Is ACL prepared to sell those additional income sources to CCFC?
ACL: The offer agreed by Sisu/CCFC on 29 January was our best and final offer.
CCFC: CCFC wanted to regain access to to match-day revenues (i.e. all revenues which only occur because a football match is taking place) as part of a negotiated solution
22: In addition to the additional turnover are you expecting CCFC to take over the associated additional costs that each source incurs?
ACL: Yes but we are only in discussion on food and beverage. This would form part of the agreement with Compass. Costs and overheads will be integral to any financial model.
CCFC: Yes of course we would pay costs
23: Are some of these sources sold to the club by ACL from match to match then sold on by the Club? E.G car parking in corporate packages.
ACL: Yes. We do not know how they account for it.
CCFC: I don’t know. [the point about no room to make a profit is related to F&B revenues – the F&B revenues and margins appear to be much lower than at other clubs, e.g. Charlton made £1.8m in League 1)
24: Did CCFC inform ACL that it intends to move to a new built ground in South Warwickshire
ACL: Yes, Chris West and Paul Harris were advised post 29 January 2013 meeting during a follow up discussion with Tim Fisher, Mark Labovitch and John Clarke, that the Club wanted a three year run off period. This was totally rejected by the ACL representatives. There were no details provided of the location other than “South Warwickshire”, and that it would potentially take three years.
CCFC: Yes but this is very much a Plan B. With modern building techniques a stadium could be built quicker and cheaper than ever. Majority of funding would be done by developer who would benefit from retail, hotel as well as bank lending and CCFC would simply cover any funding gap. This is a feasible option but not CCFC’s preferred course of action – that is reaching agreement and staying at the Ricoh.
25: Is the new loan through CCC now fully in place
ACL: Yes
26: How much is owed to SISU, its investors, owners and/or associated companies?
CCFC: Over £45 million but this has been fully written off.