Ricoh ownership (1 Viewer)

The council are coining it.Theyre making up for the years of abuse taken for not having a stake in the NEC. God knows where the money goes.Maybee the broadgate patio?

Patio? Looks more like a car park.

well we need to buy into stadium and soon

oldskyblue should be able to clear this up, he's good at these things

From memory wingy the club got themselves into a complete mess regarding the Ricoh. Could be wrong on some of this because its a while back (anyone has better details please fill in the gaps)........

The club sold Highfield Rd and had to get out
The build of the stadium was delayed in part by land issues but also because the original developer caught a cold when our friends down the m69 went into administration and couldnt pay millions of pounds
The club had invested substantial funds into the project and basically ran out of money
They did a deal with both the Higgs Trust and Council to take over the financing build of the new stadium
This left Higgs and Council owning the management company which owns the lease of the stadium - the council own the feehold
CCFc became tenants of the stadium on a part time basis originally at a cost of £2m per year which after 2 years was renegotiated down to £1m but a deposit of £1m paid to secure the rent payments to ACL
THe management company made a profit of £500K in 2010 and had accumulated losses of £6.6m at 30/05/10
The shares are divided equally between North Coventry Holdings Ltd (owned by Council) and Football Investors Limited (owned by Higgs Trust)
CCFC have an option to buy the shares controlled by Higgs Trust for a reported £10m - they paid £1m for that option but in the 2010 Sky Blue Sports & Leisure Group accounts this was written down to nil because with the club struggling to keep going it is reasonable to think they wont find £10m to buy the 50% share from Higgs Trust

Does 50% give a right to income or turnover - no because The council can block it but more importantly because of the accumulated losses they could not draw down a dividend on the shares because it would be illegal
50% would make ACL an associated company but not a member of the SBS&L group so the Turnover could not (I believe because rules not agreed for next year yet) be used in a League wages cap calculation

It is standard practice in private companies for the remaining share holders to approve any incoming new share holders when part of shares are sold. The council have repeatedly said that they need to see that anyone buying the Higgs Trust shares or even their own shares have a sustainable, long term business. They have not said they wont sell to SISU or anyone else - they said if the owners of CCFC could show the club financially sound they would look at it.

Are the council right to take the stance - yes because between them and Higgs Trust they took over and financed the successful build that CCFC could not do. The Council have to safeguard the rate payers money plus safeguard the reputation of the city for providing a first class venue. The council could have built the stadium without CCFC (admittedly not much point but they could have) without the stadium CCFC would not be here.

CCFC has for many years and under many Boards & owners proven to be at best inept - I can very well understand why the council are playing hard ball, the history points to a nationally know stadium being in the wrong hands if CCFC get it. Hopefully that will change.

Bottom line though is that CCFC and ACL need each other and need to find a solution (compromise) that benefits both

Dont know if that helps wingy - but thats my understanding of that part of this sorry mess

Actually I think the way out of this is a cross between RR's intentions for the squad and what SISU are doing with the finances.

I think where each were wrong is that RR didnt tailor things so that the club lived within its means in terms of player dealings. Where SISU have it wrong is that they are not prepared to finance the squad even in a small way to move things forward.

RR had the right idea in picking up players young (cheap) using their skills to take club forward, which would mean better crowds and more income, plus decent sales of some those players. That would have built turnover and finances enabling the Ricoh to be more than a dream. Equally by restricting the expenditure SISU are bringing financial control to the club, which will mean given time creditors are paid, that the business is sustainable and that purchase of the Ricoh possible because the council see a viable business.

Both started from the wrong place. RR didnt get the financials in order, and SISU did not budget for squad investment. Both gambled- one on promotion the other has on staying up. (One failed hope the second doesnt). Both wanted financial strength and went about it in different ways, neither achieved it as yet. Has taken many years to financially cripple the club and it isnt all down to RR or SISU. Successive boards/owners had the opportunity to deal with these problems and none had the balls to do it, prefering to leave the blame lay with the next guys in charge.

IT should not have taken 4 years to figure this out. Nor should the fans have been treated so shabbily by all concerned. I do think a balance between RR and SISU approaches would turn the club around and ultimately get us the Ricoh but it isnt going to be painless or quick

so even if we buy 50% the council may NEVER sel the other half to us? surely they would get backlash from msot of the city on this(well the fans)?? if cov go under the ricoh wouldnt be as glamerous i would ahve thought

older is correct but just clarify...

ACL is the management company set up by coventry council and are the leasee?
50% of the shares in ACL 100% shareholding (the management company) going to CCFC would enable us to get income from the Ricoh.

The Council owns the stadium freehold with the Higgs trust.

We pay 1m a year to ACL the lease holder of the stadium.
If we buy into 50% stake (for a reported 10m) we would not own any of the freehold. We would be buying into the lease holder and become a co leasee with all income streams from the stadium split between us and them (ACL)
ACL are a council set up company so in effect the council are earning the 50% stream with the Higgs Trust.
The other 50% stream would be to CCFC.

Eventually of course the council would look to 'offload' their freehold ownership of the stadium. A free hold price would have to reflect the amount of monies CCFC pumped in in the first place and the rescue package the council had to come in with when the build was done.

Now as older says memories of all this is a little patchy now so if older you can confirm what I'm getting at or I have brought up a few missed points then please patch it together......:wave:

So if we buy our option

Sorry Paxman got to disagree on something

getting 50% of the shares in ACL does not give us a right to income at all. Any distribution can be blocked by the council but more importantly income would be from dividends on the shares and ACL cannot pay dividends legally because there are no distributable profits. All income streams remain as ACL's a company which we would own half of.

The only way we get half the net income is if we go into a joint venture to own the site lease 50% :50% with ACL. But that would be even more expensive because we would be asking the council and higgs trust to sell half of the total lease not take up the option on the Higgs share.

People talk about the council getting the 50% of income stream they dont. ACL gets 100% of the income stream but are owned by the council and Higgs trust equally. Its like saying shares I may have in ICI i have a right to that percentage of their turnover - I dont I have a right to dividends and to sell my shares at market value

well that seams to be that then sisu wont buy ricoh wish i could but two quid wont do it

How about if CCFC pull out of the Ricoh? What the hell would they do with the bloody place?

Tonylinc said:

How about if CCFC pull out of the Ricoh? What the hell would they do with the bloody place?

Click to expand...

That may be where people finally have to sit round a table and talk sense.

If our crowds drop much lower, there may be little point playing at the ricoh. Ther has to be a tipping point, where it becomes more costly to play there, than what it generates?

oldskyblue58 said:

Sorry Paxman got to disagree on something

getting 50% of the shares in ACL does not give us a right to income at all. Any distribution can be blocked by the council but more importantly income would be from dividends on the shares and ACL cannot pay dividends legally because there are no distributable profits. All income streams remain as ACL's a company which we would own half of.

The only way we get half the net income is if we go into a joint venture to own the site lease 50% :50% with ACL. But that would be even more expensive because we would be asking the council and higgs trust to sell half of the total lease not take up the option on the Higgs share.

People talk about the council getting the 50% of income stream they dont. ACL gets 100% of the income stream but are owned by the council and Higgs trust equally. Its like saying shares I may have in ICI i have a right to that percentage of their turnover - I dont I have a right to dividends and to sell my shares at market value

Click to expand...

This is just it.

If owning the Higgs share of ACL makes you money, where would that income have gone so far? Into the Higgs Charity? Moth balled? Where would that income have go to?

I think people are too caught up in this. We'll never have the dosh to buy the entire stadium & I doubt you'd get much money back!

I think its just a sound bite to get fans onside