Moderator (2 Viewers)

[Flying Fokker]

Well said M m m

They were both working off budgets at the start. Why should ACL adjust theirs because SISU failed miserably (apparently).

 

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[sky blue john]

If the club bought the Higgs share in which they are entitled to do so for a fee in the region of 10million.
Would'nt this make them entitled to half of all ACL's revenue streams ?

 

[dongonzalos]

I have to agree with Otis on this one.

Tim Fisher said getting this rent issue sorted takes the highest priority

He thinks a mediator will achieve this.

Yet he posts it on a web site then says they know my number I await their call.

If it was a genuine would have thought he also knows their number.

He picks up the phone makes his suggestion to them directly or asks for an urgent meeting and does the same.

Then if they reject come and tell us the fans about it.

Instead the fact he pops it on a web site and says I await their call causes further delay.

Unfortunately a feel delay is the name if the game.

ACL offered something that clearly was acceptable TF shook on it.

Now they are again trying to ask for something that isn't

If that got offered I wonder .......

 

[dongonzalos]

Well said M m m

They were both working off budgets at the start. Why should ACL adjust theirs because SISU failed miserably (apparently).

That's what I thought.

I also thought they were going to do until they realised they could force ACL out of business

 

[sky blue john]

A lot on here have supported Sisu's tactics and pretty much stuck two fingers up at ACL and had survival of the fittest attitude !!!
Im unhappy that Sisu's tactics have definately cost us the best manager we have had in twenty years !!!

 

[Warwickhunt]

I feel that through out all of this and Even though the Council used my Money to bail ACL out, ACL are in dire straights and are still dependant upon a Football or any other team that is willing to pay £400K + Match day fees to survive.
CCFC have trimmed their losses and need to probably move Murphy & Woods on to get their Salary cap below the 60% demanded by the league and seem to have £150k + Match day fees set in their plans.
This Mexican stand off is going to take some sorting as I see either way someone is going into Administration! however if its CCFC the end out come can only be Liquidation.

 

[sky blue john]

Warwick hunt so as you believe that ACL are in trouble still or are without the football rent.
If so where do you think all the money is that ccfc should be entitled to ?
If ACL were rolling in cash then they would be making loads of profit and not in trouble !!!!

 

[Grendel]

A lot on here have supported Sisu's tactics and pretty much stuck two fingers up at ACL and had survival of the fittest attitude !!!
Im unhappy that Sisu's tactics have definately cost us the best manager we have had in twenty years !!!

Yawn yawn. More nonsense from you. Robins left for money. Unless of course you believe Mr Greedy and the lack of support from the council is to blame.

 

[Warwickhunt]

Well if I was a council house rent payer the Council would have served and implemented an Eviction order by now and wouldhave had the courts backing! So do we assume that ACL really have CCFC interest at heart and do not want to be seen as the Instrument that finally Nailed CCFC? Or can we assume that they cannot get anybody else to take up the hole that CCFC would leave in their budgets and the realit is that the Ricoh Arena cannot survive on concerts alone or piddly events run at the Jaguar Hall every couple of weeks. Does anyone know how much it costs to run the Ricoh in a given year?

 

[Warwickhunt]

I bet its more than £400K

 

[Mary_Mungo_Midge]

Yawn yawn. More nonsense from you. Robins left for money. Unless of course you believe Mr Greedy and the lack of support from the council is to blame.

I'd like to understand your candid comments on one issue old boy; as it was running through my mind yesterday. Think about the 'design' of the financial plan behind the Arena. We all know ACL stepped in due to the club's inability to finish the project. A number of decisions were made on or around that time, catering subcontracted to a third-party, etc - all of which appeared correct at the time. ACL even offered McGinnity a 'stepped' rental - more in the Premier League, less in lower divisions; which he rejected (this is an issue SISU could have sought to address in their due diligence, but didn't - bit that's another story).

We all know that the Arena was estimated in income in terms of a 22K gate. If you assume a 30-game season, allowing for cup games, the rental would have equated to about £1.90 per ticket per game. At the time SISU took over, the gates were close to 18K - so then £2.20 per game.

If you ignore the relative rent for a moment, that leaves anyone running the cub with an elegantly simple business plan to adhere to. They retain some 85% of ticket income to bring about a turnover in the parish of £8m at 22K attendance, or closer to £7m for gates the like of which SISU inherited. Which is topped up with net transfer fee surplus (SISU have made much more that they've invested in player transfers over term), TV revenues, shirt sponsorship and club shop fare to give an operating income. Against which expenditure is matched.

From this simple model, where has £45m invested since December 2007 come from? Or £6m lost in the last set of accounts alone?

It does appear - does it not - that an opportunity to start 'debt free' has been blown, doesn't it?

And as I keep asking, if at entity can't make something out of something so simple; why do they deserve additional income to potentially squander?

 

[Godiva]

If you ignore the relative rent for a moment, that leaves anyone running the cub with an elegantly simple business plan to adhere to. They retain some 85% of ticket income to bring about a turnover in the parish of £8m at 22K attendance, or closer to £7m for gates the like of which SISU inherited. Which is topped up with net transfer fee surplus (SISU have made much more that they've invested in player transfers over term), TV revenues, shirt sponsorship and club shop fare to give an operating income. Against which expenditure is matched.

From this simple model, where has £45m invested since December 2007 come from? Or £6m lost in the last set of accounts alone?

It does appear - does it not - that an opportunity to start 'debt free' has been blown, doesn't it?

And as I keep asking, if at entity can't make something out of something so simple; why do they deserve additional income to potentially squander?

Ranson blew it.
The economic world changed and the gates declined. Ranson failed to cut costs accordingly.

So yes - an opportunity to start 'debt free' has been blown.

 

[Grendel]

I'd like to understand your candid comments on one issue old boy; as it was running through my mind yesterday. Think about the 'design' of the financial plan behind the Arena. We all know ACL stepped in due to the club's inability to finish the project. A number of decisions were made on or around that time, catering subcontracted to a third-party, etc - all of which appeared correct at the time. ACL even offered McGinnity a 'stepped' rental - more in the Premier League, less in lower divisions; which he rejected (this is an issue SISU could have sought to address in their due diligence, but didn't - bit that's another story).

We all know that the Arena was estimated in income in terms of a 22K gate. If you assume a 30-game season, allowing for cup games, the rental would have equated to about £1.90 per ticket per game. At the time SISU took over, the gates were close to 18K - so then £2.20 per game.

If you ignore the relative rent for a moment, that leaves anyone running the cub with an elegantly simple business plan to adhere to. They retain some 85% of ticket income to bring about a turnover in the parish of £8m at 22K attendance, or closer to £7m for gates the like of which SISU inherited. Which is topped up with net transfer fee surplus (SISU have made much more that they've invested in player transfers over term), TV revenues, shirt sponsorship and club shop fare to give an operating income. Against which expenditure is matched.

From this simple model, where has £45m invested since December 2007 come from? Or £6m lost in the last set of accounts alone?

It does appear - does it not - that an opportunity to start 'debt free' has been blown, doesn't it?

And as I keep asking, if at entity can't make something out of something so simple; why do they deserve additional income to potentially squander?

I think the question you are asking is why we have lost more and more money.

The answer is the SISU appointed representatives spent without proper budgeting. Ranson was not fit for purpose and in the early years SISU did nothing to manage costs -- quite odd for a Hedge Fund.

Look at some of the purchases and salaries -- Eastwood £1.5 million and a 5 year deal - he will have cost £4 million alone. Ranson sacked managers paying 3 at a time at one point. He blew it.

 

[grego_gee]

Well if I was a council house rent payer the Council would have served and implemented an Eviction order by now and wouldhave had the courts backing! So do we assume that ACL really have CCFC interest at heart and do not want to be seen as the Instrument that finally Nailed CCFC? Or can we assume that they cannot get anybody else to take up the hole that CCFC would leave in their budgets and the realit is that the Ricoh Arena cannot survive on concerts alone or piddly events run at the Jaguar Hall every couple of weeks. Does anyone know how much it costs to run the Ricoh in a given year?

I bet its more than £400K

What has the entire running costs of the Ricoh for a year got to do with it?
as I understand it, CCFC only get use of it for 25+ matchdays for the rent they pay. What offices they did have, they have had to move out to Ryton and they feel more at home on away grounds than they do at the Ricoh!
Are you saying they are under some obligation to pay the whole running costs? Or is that the expectation?

imp:

 

[Mary_Mungo_Midge]

Ranson blew it.
The economic world changed and the gates declined. Ranson failed to cut costs accordingly.

So yes - an opportunity to start 'debt free' has been blown.

Gates haven't declined dear chap. From 2007-08 season through to this, across the top three divisions, crowds have held-up. If you look at the 'average' gates of each division, each season, they're identical to within a few hundred. Our gates have been decimated though. That I agree

 

[Mary_Mungo_Midge]

I think the question you are asking is why we have lost more and more money.

The answer is the SISU appointed representatives spent without proper budgeting. Ranson was not fit for purpose and in the early years SISU did nothing to manage costs -- quite odd for a Hedge Fund.

Look at some of the purchases and salaries -- Eastwood £1.5 million and a 5 year deal - he will have cost £4 million alone. Ranson sacked managers paying 3 at a time at one point. He blew it.

I don't disagree with that. However, I think you can see that - at the time contracts were drawn-up - there was an ambition to give the club a simple business plan; that really should have been sufficient to not take us where we currently now are. As I tried to state the other day, Aunty Joy has been behind every board; from Ranson through, Onye, Orange Ken and now F&W. As such, and it being 'One-SISU'; the current lack of grace in negotiation is a touch startling, isn't it?

And do you also not agree that a touch less ill-feeling in negotiation might have arrived at a more prompt conclusion than where we currently are?

 

[dongonzalos]

If the club bought the Higgs share in which they are entitled to do so for a fee in the region of 10million.
Would'nt this make them entitled to half of all ACL's revenue streams ?

That's what I thought.

I also thought they were going to do until they realised they could force ACL out of business

 

[dongonzalos]

Do SISU have to pay anything for choosing not to invest last year that led to our relegation.

A fact they admitted as a mistake.

That is why we are in League one

Do ACL now shoulder all the brunt of the costs for those mistakes by SISU?

Rent of 250k and 100 k catering profits is probably enough sacrifice from ACL to start with.

SISU need to prove they can be trusted to put the best interests of the club first like they didn't last year.

Once you know SISU do want the club bro succeed I am sure negotiations will improve.

However the average league one rent is suggested by Tim Fisher to be 170k. I don't know otherwise so have to accept that.

Paying an extra 5k a month for a facility like the Ricoh is IMO is a bargain.

Especially when you consider the owners put us there via not investing money last year.

 

[Grendel]

I don't disagree with that. However, I think you can see that - at the time contracts were drawn-up - there was an ambition to give the club a simple business plan; that really should have been sufficient to not take us where we currently now are. As I tried to state the other day, Aunty Joy has been behind every board; from Ranson through, Onye, Orange Ken and now F&W. As such, and it being 'One-SISU'; the current lack of grace in negotiation is a touch startling, isn't it?

And do you also not agree that a touch less ill-feeling in negotiation might have arrived at a more prompt conclusion than where we currently are?

The problem is the whole motivation behind the purchase is unclear from their perspective. Ranson's motives seem far clearer and he had no risk. All the other clubs would have been a better bet. It was an ill though through lazy purchase. It seems they just gave it to Ranson as a toy and told him to get on with it. I doubt they even thought about rent implications -- to even buy a club with no assets was dumb anyway.

I guess one day someone in SISU HQ actually looked at the clubs financial performance and thought "Oh dear this is going South". They then hit the panic button. This always happens in many companies - knee jerk cost cutting. Ranson's replacement good old Ken was more evidence they were clueless. He did to us what he almost did to Southampton. Insane cost cutting without thought of the loss of revenue his actions would result in.

Fisher is the best of the three. The problem of course is his task is to recover the disastrous losses from prior years and the only way this is remotely possible is to get the asset base up as at least he understands the need to remain competitive on the field. So he is attempting to sieze control.

The relationship is broken. I cannot ever see an agreement between these two parties as they are at war with each other. In the short term the club is hoping that the Council will not dare take the action they can take. They won't yet. In the summer something will have to give. SISU will I think want all their objectives fulfilled or its goodnight all.

 

[Godiva]

I think the question you are asking is why we have lost more and more money.

The answer is the SISU appointed representatives spent without proper budgeting. Ranson was not fit for purpose and in the early years SISU did nothing to manage costs -- quite odd for a Hedge Fund.

Look at some of the purchases and salaries -- Eastwood £1.5 million and a 5 year deal - he will have cost £4 million alone. Ranson sacked managers paying 3 at a time at one point. He blew it.

Ranson was a shareholder.
There would be a shareholder agreement, and this agreement seems to have stipulated something like: The board is responsible for the 3yr plans and budgets. Sisu will provide fundings according to the 3 yr financing plan.
Sisu only had one representative at the board - majority was Ranson/Hoffman/Elliot. Costs was managed by them.

Sisu clearly rejected to put in more cash when the 3 years had past and the plans had all failed. That was the only way to get rid of Ranson.

When he left, sisu have been managing the costs. Much to the agony of the fans.

 

[Godiva]

Ranson's motives seem far clearer and he had no risk.

Not so, his stake was Prozone ... and he lost it.

 

[Jack Griffin]

Not so, his stake was Prozone ... and he lost it.

Yep, though TBF he was also paid a directors fee and interest on a loan to the club that mitigated that loss.

Spookily I almost agree with what Grendel has just said, however I'm not sure it is a total end game in the summer..
I think matters will drag on with no clear agreement.. sadly I reckon we have at least another 3 years of this..

 

[Grendel]

Not so, his stake was Prozone ... and he lost it.

I thought he sold it to the Group and I was under the impression the club had to at the point of takeover loan money to Ransons company portfolio - loans that are still being paid back.

 

[dongonzalos]

The problem is the whole motivation behind the purchase is unclear from their perspective. Ranson's motives seem far clearer and he had no risk. All the other clubs would have been a better bet. It was an ill though through lazy purchase. It seems they just gave it to Ranson as a toy and told him to get on with it. I doubt they even thought about rent implications -- to even buy a club with no assets was dumb anyway.

I guess one day someone in SISU HQ actually looked at the clubs financial performance and thought "Oh dear this is going South". They then hit the panic button. This always happens in many companies - knee jerk cost cutting. Ranson's replacement good old Ken was more evidence they were clueless. He did to us what he almost did to Southampton. Insane cost cutting without thought of the loss of revenue his actions would result in.

Fisher is the best of the three. The problem of course is his task is to recover the disastrous losses from prior years and the only way this is remotely possible is to get the asset base up as at least he understands the need to remain competitive on the field. So he is attempting to sieze control.

The relationship is broken. I cannot ever see an agreement between these two parties as they are at war with each other. In the short term the club is hoping that the Council will not dare take the action they can take. They won't yet. In the summer something will have to give. SISU will I think want all their objectives fulfilled or its goodnight all.

I often thought of this did they really think

Throw 30 million at this ( bearing in mind our debt)

Left about 5 million for players

And we will get prem football and half the Ricoh to sell as a package for 100 million

They are a hedge fund surely they had a back up plan and surely where we are now was not that plan?

 

[Godiva]

I thought he sold it to the Group and I was under the impression the club had to at the point of takeover loan money to Ransons company portfolio - loans that are still being paid back.

Prozone was put into SBS&L in return for the 18% shares to Ranson and a £1.5m loan from Arley (RR's company group).
Prozone was sold for £7m and part of that was used to pay out the loan to Arley.

I think Ranson left a poorer man to when he came in.

 

[CCFC_GT]

Originally Posted by CCFC_GT http://www.skybluestalk.co.uk/threads/26902-Moderator/showthread.php?p=370662#post370662
Whatever the rights and wrongs in the way SISU has gone about its business in taking on ACL over the whole rent/rates/revenue issue, and i am not seeking to defend them here, the deal that ACL has proposed doesn't offer any significant increase in revenue, which CCFC needs in order to build a better team under FFP rules, and which would better reflect what the CCFC brand and matchday activities contribute to the overall revenue stream of the Arena.

Given SISU have made a truly awful job of running the club so far, and have behaved reprehensibly in their efforts to clamour for additional income; what confidence can you instill in me that they deserve a bigger train set to play with?

ACL have constructed a tidy little business, against a model agreed with CCFC's officers at the time. You now want them to give away income to support a company that's so far proven itself incapable of operating properly. Do you know that the club lost in its last set of accounts? Over £6m in one trading year. How can this be managed from a debt-free position?

Sorry MMM (and CSB) you are both talking about SISU when the point i made is that CCFC needs increased revenue, as this is the only source of funding by which it can invest in the squad under FFP rules. So please don't shoot me down as a SISU supporter because that I am certainly not.

Let me try and explain further ... and this intended to open a sensible debate for everyone interested from a CCFC perspective rather than just the antagonists perched firmly on one side or the other of the ACL/SISU divide.

Putting aside the debate on who should pay or who should be entitled to what at the moment, my question is:- is the combined business of CCFC and ACL simply not sufficient to sustain both companies, particularly now that the football club is constrained by FFP rules? Is there just not enough in the revenue pot to go around? Is it a choice between the survival of ACL or the progress of CCFC?

ACL made a profit of only around £500k last year I believe, or would have done if CCFC had paid the rent that was due. The rent reduction that ACL has already offered would appear to put it (ACL) in a loss making situation unless it performs better and increases its own income from other sources (which it claims it has done since). So nobody can argue that the current rent offer is not a very good one from whatever perspective you look at it.

Regarding the effect of FFP rules on CCFC ... The Football League's own website (http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html) says "The SCMP (Salary Management Cost Protocol) broadly limits spending on total player wages to a proportion of each club's turnover", i.e. the total amount of money the club receives. However after listening again to the interview that TF gave on 15/02 (at 8 minutes in), he stated that the amount a club can spend on players is linked to "allowable revenue", that is to say total revenue (turnover) less cost of sales (which as far as I understand it would be for example match day costs, but not such things as rent). So even if the rent is reduced to zero it doesn't give CCFC even £1 more to spend on players. I also believe that a cash injection to CCFC by SISU would not be treated as revenue, because it would not be generated by the business sales / activity of the football club, and so this wouldn't give CCFC anything to spend on players either. I am happy to be corrected on any of this if my assumptions are wrong.

If I am right this means that the only way CCFC can spend more on the team is if it gets additional revenues. So unless there is significant change on the revenue front (and I just can't see ACL agreeing to this under any circumstances) we just have to hope that we can win promotion with the present level of spending on the squad.

 

[grego_gee]

Originally Posted by CCFC_GT http://www.skybluestalk.co.uk/threads/26902-Moderator/showthread.php?p=370662#post370662

If I am right this means that the only way CCFC can spend more on the team is if it gets additional revenues. So unless there is significant change on the revenue front (and I just can't see ACL agreeing to this under any circumstances) we just have to hope that we can win promotion with the present level of spending on the squad.

Yes I agree, this is the crux of the issue,
but I don't think your assumption that rent is not included in costs of sales is right.
I think it is included in cost of sales, why wouldn't it be? Did you see anything anywhere to suggest it should be excluded?
imp:

 

[oldskyblue58]

if it helps I posted a thread about how FFP is calculated earlier

http://www.skybluestalk.co.uk/threads/26949-FFP-rules

Rent btw is classed as an overhead not a cost of sales

 

[Grendel]

if it helps I posted a thread about how FFP is calculated earlier

http://www.skybluestalk.co.uk/threads/26949-FFP-rules

Rent btw is classed as an overhead not a cost of sales

Are they no concessions for newly relegated teams who have players on Championship contracts?

 

[oldskyblue58]

not that i am aware of but if you email the football league they should be able to tell you

[email protected]

 

[grego_gee]

if it helps I posted a thread about how FFP is calculated earlier

http://www.skybluestalk.co.uk/threads/26949-FFP-rules

Rent btw is classed as an overhead not a cost of sales

Thanks OSB, but where does it define rent as an overhead and excluded from cost of sales? I think Fisher in that interview mentioned costs as in excess of £1m and I would have thought rent was the major part of it.

imp:

 

[CCFC_GT]

if it helps I posted a thread about how FFP is calculated earlier

http://www.skybluestalk.co.uk/threads/26949-FFP-rules

Rent btw is classed as an overhead not a cost of sales

Thanks OSB, I hoped you would chip in with some guidance. So are my assumptions (as far as they go) on the effect of FFP correct? They seem to be, having checked your thread.

 

[CCFC_GT]

Thanks OSB, but where does it define rent as an overhead and excluded from cost of sales? I think Fisher in that interview mentioned costs as in excess of £1m and I would have thought rent was the major part of it.

imp:

OSB is better placed than me to answer but I checked on the internet for what cost of sales does/doesn't include before posting.

 

[oldskyblue58]

Thanks OSB, but where does it define rent as an overhead and excluded from cost of sales? I think Fisher in that interview mentioned costs as in excess of £1m and I would have thought rent was the major part of it.

imp:

no i think those direct costs will be things like the purchase of goods to sell in the shop, pitch maintenance, playing insurance, kit and small equipment purchases, ticketing costs etc. He did mention £1m in direct costs but as rent is £1.3m it couldnt be part of it. In the 2011 accounts direct costs were 995k.

Rent is generally a fixed cost not dependent on the level of sales - and therefore not a direct cost linked to sales. Nearly always goes as an overhead in any accounts I prepare

 

[oldskyblue58]

Thanks OSB, I hoped you would chip in with some guidance. So are my assumptions (as far as they go) on the effect of FFP correct? They seem to be, having checked your thread.

"Regarding the effect of FFP rules on CCFC ... The Football League's own website (http://www.football-league.co.uk/pag...748246,00.html) says "The SCMP (Salary Management Cost Protocol) broadly limits spending on total player wages to a proportion of each club's turnover", i.e. the total amount of money the club receives. However after listening again to the interview that TF gave on 15/02 (at 8 minutes in), he stated that the amount a club can spend on players is linked to "allowable revenue", that is to say total revenue (turnover) less cost of sales (which as far as I understand it would be for example match day costs, but not such things as rent). So even if the rent is reduced to zero it doesn't give CCFC even £1 more to spend on players. I also believe that a cash injection to CCFC by SISU would not be treated as revenue, because it would not be generated by the business sales / activity of the football club, and so this wouldn't give CCFC anything to spend on players either. I am happy to be corrected on any of this if my assumptions are wrong"

Thats pretty much correct in my opinion....... I dont think TF is right about deducting cost of sales though, well not based on what the League told me anyway.