OLD OLD OLD OLD OLD NEWS : CET: Deal struck for half of the stadium with Higgs Trust (1 Viewer)

[Evans020]

Seriously I can't see why anyone would get excited about this from a CCFC perspective


ACL will make say £1Million a year profit this year
ACL will make a lot less if the rent goes down - maybe a loss

Even if they make £1M profit a year - every year - and even if CCFC own all the 50% shares of ACL and even if ACL dividend all the profit out every year (which they wouldn't) that would net CCFC £500k a year - ok it helps but when you're running at a £3M loss - it's not going to save you

Even if the club owned ALL of ACL it's still not enough to cover the huge losses

This is not our salvation -

No disrespect if this was the case they wouldn't even bother would they.

 

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[kevinleftpeg]

SISU are a Business & want to make a profit. As they have not done this they will position themselves to ensure any losses are minimised. If they can escape within their revised scope of 'acceptable loss' they will. SISU know they have screwed it up & are not here to continue to lose money, which they will hand over fist.

My main concern is that we have a squad not equipped for L1. Too many ponces thinking they are playing below where they should be. Have to earn your stripes guys & at the moment I would put money on Massey's turning you over.

 

[skyblueman]

No disrespect if this was the case they wouldn't even bother would they.

None taken Evans - I just can't see how it can be any other way

 

[ajsccfc]

This is one step closer to four huge helicopters taking a corner each and lifting the Ricoh away to SISU's private tropical island where they'll no doubt plan world domination, because they're so evil. Can James Bond save the day?

 

[wingy]

Guess we'll be getting a post from PWKH in the near future . I agree with Skyblueman,even if you add in the oft used "It will help with the 65% for Fair Play rules " addage,it will make no difference ,they've maxed @£4.2m. for this season ,incurring a projected £3m. loss,if they increase further ,they're back at last seasons level of losses.Are they going to do that?:facepalm:

This is purely an asset to them for leverage at some point in the future .I want to be positive ,this is part of my overall wish for the Club to be in its "Own Home Making Its Own Money".

Here lies the problem as Valliant states ,look at their history here ,its not reassuring in any way.The way they've conducted themselves over the rent would be admirable if I really felt they

had the CLUB at heart ,but for their history I can't belive they do. Add in two senior resignations within ACL and the future for that Organisation looks extremely difficult with SISU at the

table. For all the reasons I feel it should be good for the club I am heavily sceptical.

 

[skyblueman]

The only benefit I can genuinely see is that they are now far less likely to fold it and walk away - for me that is all

 

[wingy]

No disrespect if this was the case they wouldn't even bother would they.

So indeed, why are they ?As its been mulled over on here many times and Skybluemans take is accurate.

 

[Evans020]

So indeed, why are they ?As its been mulled over on here many times and Skybluemans take is accurate.

Would you buy a house that you were guaranteed to lose money on

 

[SkyBlue_Bear83]

Does this give the club access to revenue and cheaper rent from the Ricoh?

 

[skyblueman]

Would you buy a house that you were guaranteed to lose money on

I don't think SISU will lose money on this - £10Million for a £500k return is OK if that's what it generates for them - could be more could be less - a lot depends on the club obviously

There is potential down the line for a higher return if the club does really well and maybe the £10Million half share of the lease may increase in value if the area is further developed

Key for me is it's not the club that benefits directly here

 

[wingy]

Would you buy a house that you were guaranteed to lose money on

You've answered you're own question Evans,they will make nothing signifcant if anything on annual Ricoh activities,So the stake is an asset to be utilised at some point in the future,most likely on exit .Millions of people have been in negativ equity 2-3 times in the last 30 years.

 

[Evans020]

You've answered you're own question Evans,they will make nothing signifcant if anything on annual Ricoh activities,So the stake is an asset to be utilised at some point in the future,most likely on exit .Millions of people have been in negativ equity 2-3 times in the last 30 years.

So in essence then we are doomed regardless..even if Hoff came in and did the same we are destined to lose out unless we buy the full shabang

 

[Sick Boy]

As you have said Evans, if it was Hoffman buying half the stadium there would be those calling for him to be knighted.

It still makes me laugh that Elliot, Ranson & Hoffman have all been seen as being separate from SISU, as though they were tricked into everything by the evil SISU.

 

[Woodster]

If the deal goes through it increases the club's long term security, whether that be with SISU at the helm or whoever. Any investment in the club from the deal would be a very unexpected bonus.

This is a good thing that needed to happen - its the first step on a long road ahead. It also doesnt make SISU good people overnight.

 

[Nonleagueherewecome]

.....so SISU had £10m+ tucked away all along, yet they still got us relegated ?

As a few of us have said for a while, they have money, they just don't want to spend it on us.

 

[skyblueman]

So in essence then we are doomed regardless..even if Hoff came in and did the same we are destined to lose out unless we buy the full shabang

We're not doomed but this is not a massive investment for the benefit of the club. The project needs one owner with deep enough pockets to develop the whole shabag - team , stadium, surrounding area etc

 

[Sick Boy]

As a few of us have said for a while, they have money, they just don't want to spend it on us.

It is more likely to be money that has come from an investor outside of SISU. Even it isn't, surely it makes sense to invest in the long-term future of the club (owning our own ground), rather than spending the money in the short-term.

 

[covcity4life]

It is more likely to be money that has come from an investor outside of SISU. Even it isn't, surely it makes sense to invest in the long-term future of the club (owning our own ground), rather than spending the money in the short-term.

NLHWC isnt very smart mate.

 

[Sick Boy]

We're not doomed but this is not a massive investment for the benefit of the club. The project needs one owner with deep enough pockets to develop the whole shabag - team , stadium, surrounding area etc

I am sure that a hedge fund would have no problem finding investors to develop the surrounding areas.

As has been mentioned before, we were told that part of an agreement would be that there would need to be investment in the team as well. It would make sense for them to invest in the team, as it creates a higher profile for the club/area.

We were also told that any money which was made would not be allowed to simply disappear, therefore it would be invested back into the club and in the long-term the club will be sold on for a healthy profit.

 

[BigadamL]

if i read right.........the deal would include developing the ground around the stadium?

surely they would of been looking for investment already for this and maybe got people lined up to develop and i can only believe that it would cost the developers money to rent the ground of who ever owns it. which would in fact bring profits up.

there is a chinese club which basicly runs on its own from profits from the development on the clubs land. i think the chinese person who was menitoned about buying Cov owns the chinese club. could this be the long term plan?

i think at the fans forum fisher and waggot made themselves look very good and this is just another step in sorting things out. for once im a little sucked in and feeling quite good but still a little reserved.

two positive things in one week surely im on the wrong website?!?!?

 

[sky blue john]

I hope the higgs trust have sorted a sell on covenant. To get a percentage of profit if Sisu sell. Because if they have bought half of something worth 80 million for 10million then there is a fat profit to be had if clever.

 

[Gaz]

After reading the views on this thread the conclusion i'v come to is that ok its not going to make us much money short term, but it's the first step taken towards us owning the Ricoh.
That has to be a good thing right ?

 

[Brighton Sky Blue]

ACL can't pay out a dividend until the mortgage has been paid off in full (anticipated to be 10-15 years' time), so it represents an excellent long term asset for the club. What it offers in the short term I'm less certain of.

 

[wingy]

So in essence then we are doomed regardless..even if Hoff came in and did the same we are destined to lose out unless we buy the full shabang[/QUO

It depends whether you belive theres "Potential" within the Stadium to increase turnover and profits .I'm sure there is but it will take a boardroom war to transform,I realy have trouble believing some of the figures quoted re ACL and the Stadium and think theres a lot more scope to grow.For instance how many gigs a year are there in the Jaguar hall ,one?
I've probably contradicted myself here from previous posts so appologies,for all the positives, the evidence of their time here keeps me highly sceptical..Would investing £10m. in the playing side produce greater rewards,I hold them accountable for the summer before last season as that consigned us to the drop and the loss of £5M. income

 

[cloughie]

what this does is give sisu some value on their '40 million investment' As stated earlier they have just payed 10 million for something worth 40 million, should they wish to sell in the future they have now got something of value to sell not just a club for a quid

They are not interested in CCFC other than that it was CCFC had exclusive rights to get the Higgs share for10 million. Higgs cannot sell direct to Sisu for 10 million thats why sisu needed to keep us going

ACL profits will soar when the mortgage is finally paid, so long term it's going to be a good revenue stream for it's owners whoever they maybe at the time

 

[skyblueman]

what this does is give sisu some value on their '40 million investment' As stated earlier they have just payed 10 million for something worth 40 million, should they wish to sell in the future they have now got something of value to sell not just a club for a quid

They are not interested in CCFC other than that it was CCFC had exclusive rights to get the Higgs share for10 million. Higgs cannot sell direct to Sisu for 10 million thats why sisu needed to keep us going

HI Cloughie, not sure I understand how 50% of ACL is worth £40Million?

 

[sylus]

i wouldn't piss on sisu if they were on fire,let alone sell them a share of the ground

 

[Sick Boy]

i wouldn't piss on sisu if they were on fire,let alone sell them a share of the ground

classy....

 

[cloughie]

HI Cloughie, not sure I understand how 50% of ACL is worth £40Million?

The cost of building the stadium was over 100 million I believe and someone stated the value of the stadium is 80 million

They aren't buying 50% of the stadium but the 50 % of the leasehold. Some would argue there ls the big difference.

When you buy a flat you buy the leasehold not the freehold, but it is still valued the same as a freehold property.
Therefore I would expect the value to be 50% of the freehold value.

 

[skyblueinBaku]

I think this is part of a long term strategy with little (if any) short term benefit to the club. I await words of wisdom from OSB.

 

[Official Away Travel]

Months of deadlock ends with groundbreaking `headline agreement'

A DEAL has been struck over Coventry City football club owning half the Ricoh stadium, the Telegraph can reveal.
Coventry City Council leaders have been briefed that a groundbreaking “headline agreement“ has been reached for Sky Blues owners Sisu to buy a 50 per cent stake in the Ricoh Arena company from the Alan Edward Higgs Charity.

The agreement follows months of deadlock over a deal considered a financial lifeline by the relegated Division One club incurring multi-million-pound annual losses.

Rumours of administration or liquidation for the club deprived of income from stadium commercial activities were alleviated when hedge fund Sisu agreed to pay any losses this season.

The Telegraph revealed in June an initial offer by Sisu had been rejected by the Higgs charity. The two parties have had secret talks intermittently since.

The breakthrough comes as John Mutton * leader of Coventry City Council which owns the other half-stake in Ricoh company Arena Coventry Ltd (ACL) * challenged Sky Blues chief executive Tim Fisher's claims Sisu has wiped out the club's debts by paying off creditors.

Coun Mutton said, while Sisu itself was the club's main creditor, he understood the club had still not paid six months of rent arrears worth £600,000 into a joint bank account, to enable ACL to continue receiving payments.

The council leader also revealed a deadline for an agreement between the club and ACL over a lower rent had been extended for a month, until October 13.

The Telegraph revealed last month the Sky Blues had rejected an ACL offer to half the annual rent to £650,000 after a High Court ruling ACL had the right to recover full rent under previous agreements.

Controlling Labour cabinet members at the council were briefed on Wednesday about the Higgs/Sisu shares agreement.

Council leader John Mutton, facing accusations by Tory opponents of secrecy over negotiations after councillors were forced to sign confidentiality agreements, told the Telegraph: “Sisu and the Higgs charity have had discussions. I understand a price has been agreed.

“...I believe they’ve reached headline terms. There is still agreement to be reached on how and when it is to be paid.

“I knew they had agreed headline figures. My group are aware of that now.” Coun Mutton said he had not had direct talks recently with Sisu or the Higgs charity, but council officers had been updating him. The council’s representatives on the ACL board are chief executive Martin Reeves and council finance director Chris West.

Coun Mutton said he was not aware of the price agreed between Sisu and the Higgs charity, who would have to agree the fineprint before the full council of 54 councillors would vote on the deal.

The council could use a veto

blocking any deal on Ricoh shares if it was considered not to be in the interests of city taxpayers.
At Tuesday’s full council meeting, Coun Mutton re-iterated evidence was requested this summer from Mayfair-based Sisu that it had a “proper business case” for both investment in the Sky Blues and the development of a leisure complex around the stadium, including hotels.

ACL recorded profits of just £470,000 last year, expected to rise to £1million this year.

The council has yet to receive any dividend from its 50 per cent share. Any profits would first be used to pay back a £21million ACL loan to Yorkshire Bank. The loan was originally taken out by the council to rescue the Ricoh project in 2003 and ensure the stadium was built on the contaminated former Foleshill gasworks site.

Development of the “leisure land” – including more hotels to support the stadium’s hotel and conferences, and events including concerts – is seen as crucial in raising Ricoh revenue. The council also wants the development to create jobs in return for taxpayer investment in the disadvantaged north-east of Coventry.

The 2003 deal gave the council and football club 50 per cent each of ACL shares. But the Sky Blues sold its half-stake to the Higgs

charity in 2007 for a reported £6million, to stave off a threat of administration.
A complicated formula giving the football club an option to buy back the shares has long been rumoured to price Higg’s charity’s 50 per cent at £10million.

The Higgs charity’s Peter Knatchbull-Hugessen told the Telegraph in June Sisu’s initial rejected offer had been outside the formula.

News of the headline agreement comes days after Daniel Gidney resigned as ACL chief executive, and was understood to be increasingly disillusioned over the prospect of a deal with Sisu over stadium ownership.

Coun Mutton said the council still had a “not for sale” policy on its 50 per cent share.

But he added, if “a fantastic offer came in” for the council’s shares, the full council could vote on a change of policy.

Tim Fisher, Sky Blues chief executive, said: “We have made an undertaking not to discuss this matter publically. It is a highlysensitive commercial negotiation which all sides have undertaken to conclude before speaking to other parties. On the issue of financial debt and creditor profile of the football club, I am more than happy to go through the appropriate details with Coun Mutton in person and in private.”

The deal isn't done!

They need to show and still haven't shown for the last 4 months the Money!!!!!!!! There are aloads of clauses in the deal which SISU need to meet and it's highly likely they won't .

 

[skyblueman]

The cost of building the stadium was over 100 million I believe and someone stated the value of the stadium is 80 million

They aren't buying 50% of the stadium but the 50 % of the leasehold. Some would argue there ls the big difference.

When you buy a flat you buy the leasehold not the freehold, but it is still valued the same as a freehold property.
Therefore I would expect the value to be 50% of the freehold value.

Thanks Cloughie I can see where you come from with this - obviously a lot depends on what the remainder of the lease is really worth - I would argue it is a fair bit less than the £80Million (wasn't it sold originally for £50Million ?) but certainly it is worth in excess of £20Million so on the face of it it's a very good deal for SISU

 

[Sick Boy]

The deal isn't done!

They need to show and still haven't shown for the last 4 months the Money!!!!!!!! There are aloads of clauses in the deal which SISU need to meet and it's highly likely they won't .

Thanks for your inside knowledge.

 

[lordsummerisle]

Shame this doesn't say Landlords...

[video=youtube;eKbFb6TPVEA]http://www.youtube.com/watch?v=eKbFb6TPVEA[/video]

 

[skyblue1523]

the one thing that this enables is their is something to sell if sisu bail ,so i think if someone did want to buy the club this could be a good thing.on the otherhand i hope their is some clauses in the agreement to keep the club safe.