Possible Solution (4 Viewers)

[Grendel]

I have mentioned this in another thread and some can't see it working. However in the other thread it has all got a bit diluted and as usual you have Grendel trying to divert away from the idea. So I would mind the opinion of a few of more sensible posters

Basically if you are to believe SISU that we are building a new stadium. Even if it was part funded by debt and part by investors. I would guess the club would still get an extra 20 million debt.

We pay 1-5-2 million interest per year on 9 million debt to ARVO.

So double that you are and add the existing debt we would be paying 5-6 million a year in interest. In the Championship interest counts against your FFP. So the new revenue streams that are so important for funding the squad will need 6 million off them.

My idea is we offer Wasps half of what the new stadium would cost us in debt. In this hypothetical example 9 million. We want 49% of ACL. However we say as part of the deal wasps must clear half the loan with the money (7 million).

We then inherit 3.5 million of the remaining 7 million loan.

Wasps reduce their risks straight away they now only have a 3.5 million loan. They also have CCFC committed as a fellow anchor tenant long term to the Ricoh.

To entice wasps to take the risk we guarantee we will spend the remaining 11 million on a squad that can take league one by storm and get to 6th in the championship.

The appeal for Wasps ACL will automatically increase in value when we sign the deal.
They get an instant return on their investment.
A successful CCFC would bring in crowds comparable to Wasps and far more valuable sponsorship and advertising revenue.

The moment we hit 6th CCFC get to sell the premiership dream ( ie 100 million for last place to someone) finally getting a return on their investment.

Wasps then get a partner with genuine premiership aspirations so again more money for ACL.

For me this idea is more likely to get SISU a return on their investment than building a new stadium.

You actually don't answer any questions do you which means as usual this is just some attention seeking game

Let's go through this bit by bit.

Interest paid - they don't pay any - it is deferred so this is an irrelevance and shows total lack of understanding

The second point is also an irrelevance as it quotes Avro interest rates which would differ from any funding source. The capital cost interest would be lower.

You seem to then suggest that we borrow £9 million to purchase a minority interest in the stadium company which wasps holdings use to discharge the loan. So wasps get less in effect than they paid. You can't seem to get your head around the fact wasps holdings have no liability on the loan so why use that cash to pay it off and why would sisu want it paid off as they will have no liability either?

The minority purchase is a no go. That means no input in strategic direction and most importantly no control over dividend issues as I assume this also means a monitory in the boardroom.

To say spending £11 million on the squad to take the championship by storm is laughable as stu has already pointed out. When you say spend £11 million do you mean including wages or not and how does this fit based on FFP rules as well in league one?

To ensure a better than 50 50 chance of promotion to the premier league you would need circa £100 million.

Sell up when in the top six? So when we were once under Coleman and boothroyd did the asset value rise overnight then?

If wasps wanted this what they actually would do is seek to franchise a championship club in and boot us out.

It's nonsense and the figures don't add up.

 

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[stupot07]

It's really not that complicated but you are struggling with it.

Let's remove the ACL/Wasps aspect if doing any deal with Wasps bothers you.

The funding for the new stadium will come from a mixture of Debt and Equity.
The Debt IMO will be CCFC borrowing money. IMO possibly to the tune of around 20 million. (If we are building a new stadium, training facility and academy).

This 20 million is debt we will get on top of the money we currently need to fund CCFC for a season.

I am suggesting if you are going to take on 20 million of debt use it on transfers and wages (on top of your normal planned budget) instead of the new stadium.

If you can't get to 6th in the championship by spending that sort of money (purely on players) then you have seriously got the wrong manager. If you hit 6th at some point after xmas you sell up.

The Premiership TV deal is a game changer. Getting 100 million for last place is phenomenal.

Personally I think you could pull that off and buy 49% of ACL. Which would then get you an even greater return when you sell up.

Hang on now, you're saying just gamble £20m (not the £11m you originally suggested) on getting from league one to the top 6 in the championship. Then sisu sell the club (who doesn't own any assets bar Ryton) at a profit (£65m+) ?

And yes, brentford are 6th but we have no idea what their finances look like and the point is you can't guarantee top 6, wolves got relegated from the championship whilst having one of the largest turnovers, a group of players with PL experience and one of the larges wage bills in the league. Their are no guarantees.

So again, I'll ask what if we don't get in the top 6 in the championship? Would it be worth someone buying brentford for £65m+ on the off chance they continue to stay in the top 6th, win the play offs and get promoted?


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[mrtrench]

I mostly agree with Grendel. Whether interest is deferred or not is irrelevant, it still builds up as a liability on the balance sheet and compounds. The elephant in the room is that even if Wasps agreed to sell part - and it is laughable that they would do so at this price - CCFC wouldn't own the share, it would belong to some offshore SISU entity. None of the numbers add up. Further, SISU has no itention of paying market price for a stadium anyway; the only reason they are here was because they thought they could get a bargain and sell on after a quick profit. Their investors must be livid.

 

[dongonzalos]

You actually don't answer any questions do you which means as usual this is just some attention seeking game

Let's go through this bit by bit.

Interest paid - they don't pay any - it is deferred so this is an irrelevance and shows total lack of understanding

(The interest gets put on our debt. If we build the new stadium and are promoted to the championship the interest is deducted off our total for FFP, the reason we are apparently building the new stadium. I hope all the questions are not like this where the point has already been explained)

The second point is also an irrelevance as it quotes Avro interest rates which would differ from any funding source. The capital cost interest would be lower.

(AVRO rates is what we currently borrow at the higher the risk the higher the rate. This project is increasingly risky. Our funding is likely to come from the SISU network (AVRO)

You seem to then suggest that we borrow £9 million to purchase a minority interest in the stadium company which wasps holdings use to discharge the loan. So wasps get less in effect than they paid. You can't seem to get your head around the fact wasps holdings have no liability on the loan so why use that cash to pay it off and why would sisu want it paid off as they will have no liability either?

(SISU won't do the deal Wasps did due to the risk associated with loan. This minimises the risks associated with the loan. I thought you have been paying attention to this situation? )

The minority purchase is a no go. That means no input in strategic direction and most importantly no control over dividend issues as I assume this also means a monitory in the boardroom.
(49 % would still give you significant sway in the boardroom)

To say spending £11 million on the squad to take the championship by storm is laughable as stu has already pointed out. When you say spend £11 million do you mean including wages or not and how does this fit based on FFP rules as well in league one?

(6th is not taking it by storm. Brentford are already there spending less on transfer fees)

Sell up when in the top six? So when we were once under Coleman and boothroyd did the asset value rise overnight then?

(You were not paid a 100 million for last place back then. Plus the aim back then was to get to the premiership. SISU get their money back this way by selling the dream)

If wasps wanted this what they actually would do is seek to franchise a championship club in and boot us out.

(Small problem with that one Franchising is not allowed in football)

It's nonsense and the figures don't add up

(Finally you are correct about something your replies are a nonsense. Do me a favour ask some questions that are not already answered. Plus don't make suggestions that are not actually allowed

up.

(Now can you tell me how building a new stadium has a better chance of getting SISU their money back. Than spending the same money on the squad doing a Brentford then selling up for 50-60 million? )

 

[Grendel]

(Now can you tell me how building a new stadium has a better chance of getting SISU their money back. Than spending the same money on the squad doing a Brentford then selling up for 50-60 million? )

Ah once again tu refuse to answer questions posed and hurridly divert onto another issue.

There are two main points you are missing here;

Wasps will not sell a share to the club. They have a mission statement to make themselves the biggest club in Europe. To do this they will need to maximise profit and wealth within ACl. This means total control of 356 day revenue. It's unlikely they will be paying out any dividends for many years - another reason by the way why they will not surrender control and why sisu will not deal with them.

The other thing is you seem to think relative low investment gets a top 6 place in the championship. Why I do not know. The wages alone would dwarf the amount you quote to even be remotely cormpetitive - and even then requires a huge slice of luck. Ypu keep quoting Bournemouth as they are an exception - not a rule. We have under operation premiership f

The reason you think wasps would want partnership is exactly the reason then will not. Think about it. What better for them to have a tenant in 4 years time in the premiership? Hello guys new contract £2 - £3 million a year for you now - and it hasn't cost s penny in equity.

The club ultimately is worthless with no asset base.

 

[Godiva]

(Now can you tell me how building a new stadium has a better chance of getting SISU their money back. Than spending the same money on the squad doing a Brentford then selling up for 50-60 million? )

As a few have already said - we can't know until we see a business plan. Even that is probably never going to happen, so all we have is the rules of capitalism: If the plan seem viable then investors will be attracted. That's the first step to increase the revenues. Next step is to use that revenue reasonably wise to build a team that can take us up. It could easily take a few seasons, but it's a better approach than just bet £xxm on 'red' or 'black'.

At this point in time I don't think sisu expect anyone to dream up a plan that will get them their money back in any foreseeable future. So safest option is to rebuild slowly with the revenue the club and stadium can produce.

 

[bigfatronssba]

The main issue here is whether a new stadium is going to generate sufficient income to repay its build costs, and fund the operating losses of the club.

I very much doubt that is possible.

 

[dongonzalos]

Hang on now, you're saying just gamble £20m (not the £11m you originally suggested) on getting from league one to the top 6 in the championship. Then sisu sell the club (who doesn't own any assets bar Ryton) at a profit (£65m+) ?

And yes, brentford are 6th but we have no idea what their finances look like and the point is you can't guarantee top 6, wolves got relegated from the championship whilst having one of the largest turnovers, a group of players with PL experience and one of the larges wage bills in the league. Their are no guarantees.

So again, I'll ask what if we don't get in the top 6 in the championship? Would it be worth someone buying brentford for £65m+ on the off chance they continue to stay in the top 6th, win the play offs and get promoted?


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In my original suggestion I suffered either buying half of ACL or just investing the money in the playing squad. You se to have an issue with doing business with Wasps so I explained the investing the money purely in the squad idea to you.

I am happy either would have a better chance of a return for SISU than the new stadium route. I am yet to hear you explain how the new stadium route will achieve that aim.

I will answer again I think if Brentford put themselves up for sale now they would get 50 million easily. Yes

Now I will ask again do you think SISU would get their money back via the new stadium route?

 

[stupot07]

In my original suggestion I suffered either buying half of ACL or just investing the money in the playing squad. You se to have an issue with doing business with Wasps so I explained the investing the money purely in the squad idea to you.

I am happy either would have a better chance of a return for SISU than the new stadium route. I am yet to hear you explain how the new stadium route will achieve that aim.

I will answer again I think if Brentford put themselves up for sale now they would get 50 million easily. Yes

Now I will ask again do you think SISU would get their money back via the new stadium route?

They have more chance of getting their money back with a new stadium and successful football club selling it as a job lot.

The problem with comparing us to brentford is that they own their own stadium so any owner will have an asset on the balance sheet we don't, and I very much doubt anyone would pay £50m for brentford just because they are currently sat in 6th place. Just more 'monopoly estimations'. They just don't have the infrastructure to become a PL regular.


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[dongonzalos]

They have more chance of getting their money back with a new stadium and successful football club selling it as a job lot.

The problem with comparing us to brentford is that they own their own stadium so any owner will have an asset on the balance sheet we don't, and I very much doubt anyone would pay £50m for brentford just because they are currently sat in 6th place. Just more 'monopoly estimations'. They just don't have the infrastructure to become a PL regular.


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You doubt a rich investor looking to obtain his status by taking a team to the Premiership. Would not gamble 50 million on Brentford now.

I think they would. It's double your money time if they are promoted.

 

[dongonzalos]

As a few have already said - we can't know until we see a business plan. Even that is probably never going to happen, so all we have is the rules of capitalism: If the plan seem viable then investors will be attracted. That's the first step to increase the revenues. Next step is to use that revenue reasonably wise to build a team that can take us up. It could easily take a few seasons, but it's a better approach than just bet £xxm on 'red' or 'black'.

At this point in time I don't think sisu expect anyone to dream up a plan that will get them their money back in any foreseeable future. So safest option is to rebuild slowly with the revenue the club and stadium can produce.

You recently said you believe a new stadium will be built. So what is the business case that causes you believe that SISU will get to a point where they can sell the lot for 60 million?

 

[stupot07]

You doubt a rich investor looking to obtain his status by taking a team to the Premiership. Would not gamble 50 million on Brentford now.

I think they would. It's double your money time if they are promoted.

No, I don't think they would, not for brentford.

So let's go wit your idea, sisu have funded losses of around £7m per annum for what 8 years so that's £56m, they then spend an additional £20m on trying to get into top 6 in the championship so that's £76m. So a billionaire is going to pay £76m+ to buy us off SISU when we don't own our own ground, don't have mechanisms to make much additional revenue because we might still finish in the top 6 then gain promotion? Cloud cuckoo land


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[skybluesam66]

sisu will never get back 56m
it is like a gambler chasing losses
if they were offered 15 m tomorrow, they would take it

 

[dongonzalos]

No, I don't think they would, not for brentford.

So let's go wit your idea, sisu have funded losses of around £7m per annum for what 8 years so that's £56m, they then spend an additional £20m on trying to get into top 6 in the championship so that's £76m. So a billionaire is going to pay £76m+ to buy us off SISU when we don't own our own ground, don't have mechanisms to make much additional revenue because we might still finish in the top 6 then gain promotion? Cloud cuckoo land


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So you think they are 56 million in debt now?

Let's say you are right and they spend 20 million for the honour of partly owning a 12-15k stadium.

The interest rates in the debts crushes the increase in revenue. Nullifying the FFP advantage.

The team stays in league one.

You think they will then find a buyer to recoup their 76 million.

My idea seems like the most sensible boring suggestion on the planet in comparison.

I am yet to hear anyone exam how the new stadium concept can work to get SISU their money back.

 

[stupot07]

So you think they are 56 million in debt now?

Let's say you are right and they spend 20 million for the honour of partly owning a 12-15k stadium.

The interest rates in the debts crushes the increase in revenue. Nullifying the FFP advantage.

The team stays in league one.

You think they will then find a buyer to recoup their 76 million.

My idea seems like the most sensible boring suggestion on the planet in comparison.

I am yet to hear anyone exam how the new stadium concept can work to get SISU their money back.

No, it's one of your bonkers ideas, just like if you were PH4 you'd have bought nuneaton Boro, moved them to the Ricoh, renamed then Coventry nuns, and thrown money at them to get them to the PL....

Until we see a business plan and have a better idea of how the new stadium will be funded, then we can back or write it off as an option. And in this debate we're having I'm not bigging up the new stadium, I'm pointing out splashing cash in a vein attempt to get to top 6 is a poor plan, with no guarentees and without owning a stadium/asset not likely to get them their money back. It's just another fast track to administration/insolvency.


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[dongonzalos]

No, it's one of your bonkers ideas, just like if you were PH4 you'd have bought nuneaton Boro, moved them to the Ricoh, renamed then Coventry nuns, and thrown money at them to get them to the PL....

Until we see a business plan and have a better idea of how the new stadium will be funded, then we can back or write it off as an option. And in this debate we're having I'm not bigging up the new stadium, I'm pointing out splashing cash in a vein attempt to get to top 6 is a poor plan, with no guarentees and without owning a stadium/asset not likely to get them their money back. It's just another fast track to administration/insolvency.


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The current situation is a fast tract to insolvency as is the new stadium idea.

The new stadium idea is our current proposed plan of action. It would cost about the same as top six in the championship with far less financial reward.

So it's a bit of a pointless debate when you are suggesting no alternative and it seems you only valid point is there is no guarantee of a top six place. (Breaking news there are no guarantees in football)

The requirement to distract to the Haskell diversion shows a lack of a decent point to make in this debate. I am not going to try and explain that to you again allowing this thread to derail.

I am happy you have completely failed to explain how our current plan is better than my suggested one.

Just saying building a new stadium is a better idea won't cut it for me.

The concept has been explained borrow money and equity to build a new 12-15 k stadium training facilities outside Coventry. To get access to all revenue streams all year round. Get promotion as well.

 

[Grendel]

The current situation is a fast tract to insolvency as is the new stadium idea.

The new stadium idea is our current proposed plan of action. It would cost about the same as top six in the championship with far less financial reward.

So it's a bit of a pointless debate when you are suggesting no alternative and it seems you only valid point is there is no guarantee of a top six place. (Breaking news there are no guarantees in football)

The requirement to distract to the Haskell diversion shows a lack of a decent point to make in this debate. I am not going to try and explain that to you again allowing this thread to derail.

I am happy you have completely failed to explain how our current plan is better than my suggested one.

Just saying building a new stadium is a better idea won't cut it for me.

The concept has been explained borrow money and equity to build a new 12-15 k stadium training facilities outside Coventry. To get access to all revenue streams all year round. Get promotion as well.

I'd say your 5 nil down to stu in the debate and it's fair to say your idea hasn't exactly gained much support.

The Haskell thing isn't just a dig its a valid point - that you have a tendency to post outlandish views on here.

 

[skybluefred]

If by some miracle we did get to the premiership then the Ricoh would be no use to us.
We would need a stadium capable of holding 70 to 80,000 fans, if we want to remain
competitive. Yes I know the money from T/V etc is huge but top class players wages
take some paying.Also if we keep getting beat and are fighting relegation year after year
the crowds will drop and so will our income.

 

[dongonzalos]

I'd say your 5 nil down to stu in the debate and it's fair to say your idea hasn't exactly gained much support.

The Haskell thing isn't just a dig its a valid point - that you have a tendency to post outlandish views on here.

I rate your opinion up there with RFC. So cheers that confirms all I needed to know.

 

[dongonzalos]

If by some miracle we did get to the premiership then the Ricoh would be no use to us.
We would need a stadium capable of holding 70 to 80,000 fans, if we want to remain
competitive. Yes I know the money from T/V etc is huge but top class players wages
take some paying.Also if we keep getting beat and are fighting relegation year after year
the crowds will drop and so will our income.

That's just not the case anymore Fred.
Whoever gets themselves on that Little gravy train over the next couple of years will become an elite band of teams that will not fall below mid table in the championship.

If you are not one of these teams unless you get your billionaire then top ten in the championship will become an amazing achievement.

The boys yo yo'ing in and out of the prem will be a world away from the rest of football below them.