Question for PWKH (3 Viewers)

oldskyblue58 · Dec 22, 2012

i agree with that Godiva.

The quandry for ACL and its stakeholders (who are very much based in the community) is ............. if they have kick a poor non paying football club out then quite likely that's the end of the club and ACL etc will be seen by many as taking the blame for that.... which is a reason they have hung in so long and not done it. ACL and its stakeholders never have wanted to see CCFC fail

Of course the real reason for the demise of ccfc lies elsewhere .....

Would focus a lot of minds if ACL did come up with viable alternatives wouldn't it

In normal business CCFC would have been kicked out a long time ago.

Godiva · Dec 22, 2012

oldskyblue58 said:
i agree with that Godiva.

WHAAAT????

Is this a trap?

stupot07 · Dec 22, 2012

oldskyblue58 said:
i agree with that Godiva.

The quandry for ACL and its stakeholders (who are very much based in the community) is ............. if they have kick a poor non paying football club out then quite likely that's the end of the club and ACL etc will be seen by many as taking the blame for that.... which is a reason they have hung in so long and not done it. Of course the real reason for the demise of ccfc lies elsewhere .....

Would focus a lot of minds if ACL did come up with viable alternatives wouldn't it

In normal business CCFC would have been kicked out a long time ago.

In normal business the company would have found alternative affordable accommodation and moved out.

oldskyblue58 · Dec 22, 2012

no just evidence that i have finally educated you

oldskyblue58 · Dec 22, 2012

stupot07 said:
In normal business the company would have found alternative affordable accommodation and moved out.

not without settling their debts and legal contractual responsibilities they wouldnt

Sky Blues · Dec 22, 2012

oldskyblue58 said:
Would focus a lot of minds if ACL did come up with viable alternatives wouldn't it .

I would be amazed if ACL hasn't already run feasibility studies on whatever options it has - particularly given how long it has taken to get to this stage - and is just keeping its cards close to its chest for now.

stupot07 · Dec 22, 2012

oldskyblue58 said:
not without settling their debts and legal contractual responsibilities they wouldnt

I suppose my point was, in normal business it probably wouldn't have gotten this far, they would have recognised the need to downsize and would have done it relatively quickly not let it drag this long where debt racks up.

oldskyblue58 · Dec 22, 2012

The trouble is stupot07 is that even if they recognised the need they have a contractual agreement that would need to be broken and compensated - they can not just walk way and that situation remains today.

I also think moving out is short sighted ................ if the team is successful and crowds increase how do they maximise that potential if they do not have the space to do it. If we are pushing play offs or better in April I reckon we may well be getting close to 20K attendance especially if going to Wembley too............. you dont accomodate that potential by down sizing

That in money terms would add something like £140k per game to income above where we are now ....... couldnt do that at Hinckley or Rushden for example

dongonzalos · Dec 22, 2012

So CCFC want 200k and all food ect...and won't budge.
Their argument this is slightly above the average for league one.

ACL compromise from 1.2 to 400k and offer 10 % of food etc and ten years to pay back debt.

Their argument you put us in league one, it is not an average league one facility or club, your biggest expenditure and problem is wages not rent.

SISU's argument need the lower rent to move the club towards self sufficiency. The club is part of the community. You won't find anyone else.

ACL you took on a contract you are legally obligated to honour it.

If that about summarises it. It is going to take some serious work to compromise.

I would guess a rent of 400k, 50% of the food etc..
And the ten years would be about all ACL would be prepared to do.

Bit of a crazy one but if the Ricoh ended up empty could someone do a Wimbledon Mk Dons scenario and put a club in there.

stupot07 · Dec 22, 2012

oldskyblue58 said:
The trouble is stupot07 is that even if they recognised the need they have a contractual agreement that would need to be broken and compensated - they can not just walk way and that situation remains today.

I also think moving out is short sighted ................ if the team is successful and crowds increase how do they maximise that potential if they do not have the space to do it. If we are pushing play offs or better in April I reckon we may well be getting close to 20K attendance especially if going to Wembley too............. you dont accomodate that potential by down sizing

I agree OSB, just making the point that this isn't normal business it''s a special case with special circumstances, which is why the old 'house renting' analogy that so many like to use is inappropriate.

I have a feeling the rent will get sorted and a compromise made by both parties.

dongonzalos · Dec 22, 2012

stupot07 said:
I agree OSB, just making the point that this isn't normal business it''s a special case with special circumstances, which is why the old 'house renting' analogy that so many like to use is inappropriate.

I have a feeling the rent will get sorted and a compromise made by both parties.

It is very easy to remove the word house and insert Ricoh or Factory and you had the same scenario.

Bar the fact it seems ACL may not have a realistic feasible alternative and neither do SISU.

But how defensible is it for ACL to have a tenant paying nothing anyway. At some point they have to cut their loses due the tenant and give a go at the alternative as they will go out of business anyway if they don't.

oldskyblue58 · Dec 22, 2012

and yet given all the financial arguments in favour of staying, a deal that most fans support as reasonable, the potential appearing on the pitch, a growing optimism of the fans watching giving increased financial return, the possibility of maximising cup windfalls, the extra professional costs incurred ............. TF and SISU still wont reach a compromise :thinking about:

Godiva · Dec 22, 2012

oldskyblue58 said:
and yet given all the financial arguments in favour of staying, a deal that most fans support as reasonable, the potential appearing on the pitch, a growing optimism of the fans watching giving increased financial return, the possibility of maximising cup windfalls, the extra professional costs incurred ............. TF and SISU still wont reach a compromise

What the fans (who have no access to all information) think or support is totally irrelevant. If the club is out of money and can't afford the latest offer, then it doesn't matter one bit what people think.

But I still think the biggest issue is the outstanding rent owed. They will have to agree to backdate the new rent.

stupot07 · Dec 22, 2012

dongonzalos said:
It is very easy to remove the word house and insert Ricoh or Factory and you had the same scenario.

Bar the fact it seems ACL may not have a realistic feasible alternative and neither do SISU.

But how defensible is it for ACL to have a tenant paying nothing anyway. At some point they have to cut their loses due the tenant and give a go at the alternative as they will go out of business anyway if they don't.

No the Ricoh is different from a house or even a warehouse, the tenant could easily find alternative cheaper accommodation an move out if needs be without moving out of the city.

And I am not excusing the none payment of rent - that is wrong.

oldskyblue58 · Dec 22, 2012

again Godiva i agree it is used as the stumbling block ..... twice in one day must be Xmas

From CCFC point of view Its £400k in rent (a cost against profit) and £120k paying off old debt

the effect of the deal even with the debt standing at full is a cost to cash flow of £520k down from £1.3m pa..... against which they have access to nearly all match day income (what an extra net £100k pa ? )and if successful on the pitch the possibility of £100k+ a game above current levels. Not up to ACL to ensure CCFC succeed on the pitch its up to CCFC and its owners - success on the pitch being directly related to viability.

Is the paying the old debt in reality such a big problem ? ....... it is a legal debt that SISU have known all along........ it is a past cost so doesnt affect future profitability and is covered by the extra other income streams if that estimate is correct. The Club are no worse off in reality because of it, and are best part of £800k better off per year because of the rent reduction.

The more you look at it the more TF's figures dont add up

Wrenstreetcarpark · Dec 22, 2012

and it isn't because Fisher can't add up.

Waldorf · Dec 22, 2012

stupot07 said:
No the Ricoh is different from a house or even a warehouse, the tenant could easily find alternative cheaper accommodation an move out if needs be without moving out of the city.

And I am not excusing the none payment of rent - that is wrong.

Any "feasible" move is damned hard to find. Nene Park, Hinckley and the Butts all have distinct and very real problems. The major one, however, is this: if we are locked out of the Ricoh, the club would have no say in where it played, nor for how long. The FL would step in and tell the club where it would play - and that's likely to be either the King Power, or St Andrews. They'd also make it clear that it was a (very) temporary arrangement, and they expected CCFC to be back in its "own" ground ASAP. There would then be the issue of what rent Brum or Leicester charge, and the cost of bussing season ticket holders along the A45 or M69. I doubt they'd be able to do that for the "average League 1 rent".

As for ACL, I can think of one potential replacement tenant. If I was them, I'd start talking to Northampton Rugby Club, who need a bigger ground, and play in a code whose governing body are much more amenable to moves "out of area".

oldskyblue58 · Dec 22, 2012

Or look at it from ACL's point of view

If the £100k estimate of annual income is reasonable they have given up that amount not just for 10 years but for the period of the lease.

Effectively by foregoing that income they write off the debt they are demanding and then some. They are effectively paying off that debt themselves. CCFC get extra income at no extra cost for the period of their lease.

The debt really isnt such a big problem for TF and SISU

Black6Osprey · Dec 22, 2012

OSB perhaps you can help answer these questions?

How much is the current mortgage payment?
Is CCFC rent a direct reflection of that mortgage payment?
As ACL claim do CCFC contribute 17% of their income?
Using the rather inappropriate house analogy, if you lived alone and another 5 people moved in with you, would expect them to share the rent?
Why should CCFC pay (I suspect and hope you can clarify) the vast majority of the mortgage and yet only be responsible for 17% of ACL income?

grego_gee · Dec 22, 2012

mrtrench said:
The average cost for L1 clubs is not relevant - you pay rent according to the quality of the accommodation.

Does not paying over the average on the rent put us at a disadvantage to other clubs for expenditure on the playing squad under the rules on FFP?

imp:

Waldorf · Dec 22, 2012

oldskyblue58 said:
Or look at it from ACL's point of view

If the £100k estimate of annual income is reasonable they have given up that amount not just for 10 years but for the period of the lease.

Effectively by foregoing that income they write off the debt they are demanding and then some. They are effectively paying off that debt themselves. CCFC get extra income at no extra cost for the period of their lease.

The debt really isnt such a big problem for TF and SISU

I'm not sure I follow your logic there. ACL have the perfect remedy for getting their money (and a claim for the rent for the rest of CCFC's rental period). Serve the winding up order. Even if Arvo are the biggest creditor at the moment, ACL would have an arguable case for being the biggest creditor on the winding up of the club. That would at least get back what they are currently owed, and as I said, there ARE alternative tenants.

Godiva · Dec 22, 2012

oldskyblue58 said:
again Godiva i agree it is used as the stumbling block ..... twice in one day must be Xmas

From CCFC point of view Its £400k in rent (a cost against profit) and £120k paying off old debt

the effect of the deal even with the debt standing at full is a cost to cash flow of £520k down from £1.3m pa..... against which they have access to nearly all match day income (what an extra net £100k pa ? )and if successful on the pitch the possibility of £100k+ a game above current levels. Not up to ACL to ensure CCFC succeed on the pitch its up to CCFC and its owners - success on the pitch being directly related to viability.

Is the paying the old debt in reality such a big problem ? ....... it is a legal debt that SISU have known all along........ it is a past cost so doesnt affect future profitability and is covered by the extra other income streams if that estimate is correct. The Club are no worse off in reality because of it, and are best part of £800k better off per year because of the rent reduction.

The more you look at it the more TF's figures dont add up

Oh shoot - I can't have any fun today

oldskyblue58 · Dec 22, 2012

ACL pay £1.7m pa

why does the rent have to be linked to the mortgage at all. Logic of your questions seems to be that if there were no mortgage there should be no rent charged.

right now CCFC contribute nothing to the ACL turnover ....... but 17% is the figure currently claimed and i have no reason to doubt it. Turnover last accounts was over £6.6m you do the sums if rent is 1.2m

If it is inappropriate why use it. As a landlord I would seek to maximise my return..... You might lease a whole house for one figure but be able to lease for more by the room - student accomodation comes to mind

CCFC do not pay the mortgage or even part of it they pay ACL ..... but if you want to continue that logic if they are 17% of turnover then the most they contribute is 17% of the loan repayment. The mortgage is paid from all income cashflow

Because they have agreed a contractually binding rent perhaps :thinking about:. The 17% has been arrived at because ACL have diversified in a correct effort to reduce the risk from a financially poor risk that is the football club

But the point is the rent on offer is not the rent in the contract

oldskyblue58 · Dec 22, 2012

Waldorf said:
I'm not sure I follow your logic there. ACL have the perfect remedy for getting their money (and a claim for the rent for the rest of CCFC's rental period). Serve the winding up order. Even if Arvo are the biggest creditor at the moment, ACL would have an arguable case for being the biggest creditor on the winding up of the club. That would at least get back what they are currently owed, and as I said, there ARE alternative tenants.

what i was saying is that if ACL latest offer is accepted to settle the dispute then the old debt is spread over 10yrs. approx 113k per annum to repay. On the other side of that ACL are prepared to give the additional match day income to the club that ACL currently receive - if that is worth £100k per annum then that pretty much covers the debt repayment. ACL effectively cover the cost of the repayment by CCFC because ACL lose income.

Wrenstreetcarpark · Dec 22, 2012

but if you don't want a rent deal to work, you won't accept anything. Seppala is consistent.

Black6Osprey · Dec 22, 2012

oldskyblue58 said:
ACL pay £1.7m pa

why does the rent have to be linked to the mortgage at all. Logic of your questions seems to be that if there were no mortgage there should be no rent charged.

right now CCFC contribute nothing to the ACL turnover ....... but 17% is the figure currently claimed and i have no reason to doubt it. Turnover last accounts was over £6.6m you do the sums if rent is 1.2m

If it is inappropriate why use it. As a landlord I would seek to maximise my return..... You might lease a whole house for one figure but be able to lease for more by the room - student accomodation comes to mind

CCFC do not pay the mortgage or even part of it they pay ACL ..... but if you want to continue that logic if they are 17% of turnover then the most they contribute is 17% of the loan repayment. The mortgage is paid from all income cashflow

Because they have agreed a contractually binding rent perhaps :thinking about:. The 17% has been arrived at because ACL have diversified in a correct effort to reduce the risk from a financially poor risk that is the football club

But the point is the rent on offer is not the rent in the contract

ACL haven't diversified, it was a venue for football, exhibitions with a hotel and outdoor concert area. They have done what they were supposed to.

I am not saying if the mortgage was nothing we should pay nothing but if you don't think the level of mortgage repayment has any bearing on what they decided to charge us in rent then we will just have to disagree on that one.

dongonzalos · Dec 22, 2012

stupot07 said:
No the Ricoh is different from a house or even a warehouse, the tenant could easily find alternative cheaper accommodation an move out if needs be without moving out of the city.

And I am not excusing the none payment of rent - that is wrong.

I know you are not, that was predictive text. I was saying feasible not defensible, sorry

My point is SISU are paying ACL nothing so if they cant get an agreement they as well try and recover what they are owed and give an alternative a go.

The alternative has to beat getting nothing.

Official Away Travel · Dec 22, 2012

Grendel said:
They are a private company. This had nothing to do with the taxpayer.

They are owned by the council which is local government - I'm pretty sure we pay council tax to them

Grendel · Dec 22, 2012

Ricoh2012 said:
They are owned by the council which is local government - I'm pretty sure we pay council tax to them

Our council tax has nothing to do with the ACL balance sheet. We do not pay more or less depending on ACL's profits or losses - you are wrong as usual.

dongonzalos · Dec 23, 2012

"The Council's key aim has always been, and will continue to be, to support any business plan or strategy that will ensure the future success of both the club and the Ricoh Arena. The Council and the Higgs Charity will always have the interests of the people of Coventry – taxpayers, local residents and football fans – at the heart of any decision made about the future of the Ricoh.'

Why are they referring to tax payers?

dongonzalos · Dec 23, 2012

www.ricoharena.com/about-us/The Ricoh Arena is run and managed by Arena Coventry Ltd, a joint venture company consisting of Coventry City Council and the Alan Edward Higgs Charity. It is a venue that has acted ...

dongonzalos · Dec 23, 2012

dongonzalos said:
"The Council's key aim has always been, and will continue to be, to support any business plan or strategy that will ensure the future success of both the club and the Ricoh Arena. The Council and the Higgs Charity will always have the interests of the people of Coventry – taxpayers, local residents and football fans – at the heart of any decision made about the future of the Ricoh.'

Why are they referring to tax payers?

This is six days ago the council putting its support behind ACL's decision to ask for the money it is owed. The council seemed to think this decision is in the best interest of ya payers.

dongonzalos · Dec 23, 2012

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.

I get the impression tax payers seems relevant

dongonzalos · Dec 23, 2012

Wasn't aware of this either

The Sky Blues have an option to buy that back until 2015

What happens in 2015

Grendel · Dec 23, 2012

dongonzalos said:
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.

I get the impression tax payers seems relevant

It is a generic statement.

It will not effect tax payers. ACL made profit last year council tax payers do not get a rebate.

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