skybluetony176
Well-Known Member
Was the shop and office's part of the stadium rent or was it separate again?
Most matchday parking goes to ACL, the biggest revenue earner was naming rights, they paid to rent the shop and had to pay extra every time they used the pitch to train on.
No zero value depends on the lease length. Read any article on lease valuations and observe the principal that the longer the lease the reduced value of the land and property.
Then read articles on lease valuations that exceed a property life span and observe the view that the leaseholder is then effectively the freeholder.
Your continued clutching at straws that this is a good deal and hiding behind commercial confidentiality isfooling no one. Articles in the local media have made some obvious indications as to the structure of the loan and the lease . It's fairly obvious the whole deal was weighted heavily in wasps favour and to then suggest the council have a big annual lease bonus is folly based on nothing. If there was such a bonus the CET would have had wind of it .
Your "I don't know" stance then applies to everything doesn't it? I guess we are building a new ground after all - I mean the club says so and we don't know otherwise do we?
I've seen this 'no revenue' comment a couple of times now, but of course the biggest stadium related income is from tickets and we got all that, we got pitchside advertising, car parking, a shop to sell stuff, and I believe we also got income from selling meals in whatever the VIP bits are called.
Was the shop and office's part of the stadium rent or was it separate again?
Was the shop and office's part of the stadium rent or was it separate again?
We got a limited number of parking spaces as part of the lease, I'm not certain they were all for resale as there would be spaces required for players, execs, sponsors etc. As for catering we had to purchase that from ACL but were then free to charge whatever we liked, that's a lot less margin than the club getting it at cost.
Of course if you're correct and those revenues are insignificant Wasps will have no problem giving CCFC all the revenues it generates including things such as naming rights.
Well of course most people would love to be given money for free.
I'm not sure I'd count £1.2m a year in rent as free!
I think if you're going to criticise the £1.2m figure; I think you need to present an idea as to how any new stadium should be funded. By means of comparison, the King Power stadium, in Leicester, cost £37m, 12 years ago.
If you were to borrow over a reasonable term, the interest charges on that capital - or anything even close - would be well in excess of £1.2m per annum.
So, if you borrow to build; to claim the 365-day revenues Waggott speaks of, you'll pay significantly more in interest charges via conventional borrowing than the figures - I agree is too high - at £1.2m. If you build by means of equity investor, then they'd expect a more aggressive return. So, what's the answer?
I'm not accusing you of doing it, but it's easy to criticise without offering alternative or solution. Russell Brand is making a career out of it...
As you say: It's easy to criticise ...
But from what (little) we have been told they are looking to use approximately the same approach as when the Ricoh was build: Sell off leases to fund some of the building cost and as a result the remaining interest is lower than you expect. The Ricoh cost some £100m+ to build, but what was left to mortgage was only a fraction of that.
We don't know the exact financial plan, probably because sisu can't calculate in detail until the site is known and bought. There are so many factors that will decide the final budget.
So, what's the answer?
In retrospect, or going forward?
Much as I hesitate to say it, going forwardif you were building a ground, it's why a 'modular' building process is probably wise. Football grounds, traditionally, grew organically as the club had the cash to build up and improve.
Going backward? Well... been there, done that. As an additional point though we, the fans, got sucked along into the 'no other option than the Ricoh'. It wasn't true then, much as it isn't true now (nor, for that matter, the 'no other option than SISU' line etc. or the 'club must own freehold' yadda yadda or... 'Wasps had no other option than the Ricoh). Hopefully we move to a stage where we get there are *always* alternmatives.
It's about making sure the best alternative (or least worst in our case!) gets priority in the rhetoric... something that happens all too infrequently with us.
As you say: It's easy to criticise ...
But from what (little) we have been told they are looking to use approximately the same approach as when the Ricoh was build: Sell off leases to fund some of the building cost and as a result the remaining interest is lower than you expect. The Ricoh cost some £100m+ to build, but what was left to mortgage was only a fraction of that.
We don't know the exact financial plan, probably because sisu can't calculate in detail until the site is known and bought. There are so many factors that will decide the final budget.
I just get frustrated when people think that it's a simple comparison. i.e. A = £1.2m is bad, when you don't know what B is. What if B is an investment from an equity investor we don't know, who will remain in place for many, many years after SISU decide to leave the club, is that better?
I think if you're going to criticise the £1.2m figure; I think you need to present an idea as to how any new stadium should be funded. By means of comparison, the King Power stadium, in Leicester, cost £37m, 12 years ago.
If you were to borrow over a reasonable term, the interest charges on that capital - or anything even close - would be well in excess of £1.2m per annum.
So, if you borrow to build; to claim the 365-day revenues Waggott speaks of, you'll pay significantly more in interest charges via conventional borrowing than the figures - I agree is too high - at £1.2m. If you build by means of equity investor, then they'd expect a more aggressive return. So, what's the answer?
Profitable? Probably not. New grounds really aren't to begin with - Arsenal fans probably don't fully appreciate what a job Wenger's done in allowing them to pay down the debt on *their* ground without the club suffering *too* much, and new stands nearly did for the likes of Chelsea and Wolves.
Long term, however, it seems to me the best sporting way forward - and yes how to do it without wrecking the club (ha!) is the question so yes, tangentially your oiriginal question is quite right.
We need solutions.
I'm not sure I'd count £1.2m a year in rent as free!
The Ricoh cost about £120m to build but if you look at the breakdown after all the grants, Tesco money etc CCC only put in £10m and then ACL put in the cost of the lease via a loan from YB. If we had been paying £1.2m a year for 100% ownership of ACL that would be more acceptable but it seems to me the football club was covering the vast majority, if not all, ACLs costs but not getting any of the benefit.
Plus of course we now know CCC can access credit at preferential rates so if that had been utilised from the start with a lower interest rate and longer repayment term ACLs annual repayments would have been significantly lower.
For me it seems it was down to the club to cover the cost of ACLs loan but for ACL to receive all revenues generated. hardly seems a fair deal. Maybe with a fairer deal we might not have needed to sell our share and maybe then we wouldn't have needed SISU and the disaster that has been.
if it's not profitable how is it a good thing sporting wise? the answer isn't ffp. it's a whole load of nonsense that waggott is spinning there. Our problem is we don't have the money to spend on players/wages, not that the ffp stops us spending money on players/wages.
The Ricoh cost about £120m to build but if you look at the breakdown after all the grants, Tesco money etc CCC only put in £10m and then ACL put in the cost of the lease via a loan from YB. If we had been paying £1.2m a year for 100% ownership of ACL that would be more acceptable but it seems to me the football club was covering the vast majority, if not all, ACLs costs but not getting any of the benefit.
Plus of course we now know CCC can access credit at preferential rates so if that had been utilised from the start with a lower interest rate and longer repayment term ACLs annual repayments would have been significantly lower.
For me it seems it was down to the club to cover the cost of ACLs loan but for ACL to receive all revenues generated. hardly seems a fair deal. Maybe with a fairer deal we might not have needed to sell our share and maybe then we wouldn't have needed SISU and the disaster that has been.
What mean is that the £1.2m is always banded about as being daylight robbery. And to an extent, I agree, it's far too high. But my issue is - how else could the stadium have been funded?
There's a bit of spin in here Dave, and we all hate that don't we. The Tesco money belonged to the Council didn't it, it was their land to sell, so I don't see the need to dress it up as the Council not putting the money in, why not put the real figures out and let people decide based on that?
In law CCC cannot subsidise the football club with preferential rates. The same way a bank will expect to make a return.
Works both ways, how much was the land worth before it was decided to build a football stadium and Ricoh complex there?
In which case what is the point of the current CCC loan to ACL (or indeed other businesses), why did they not borrow commercially?
This is key to understand how a new stadium could be partly financed without leaving a too much of an interest burden.
You confuse profit motive with sporting motive.
Oh, and I'm making an assumption that current owners are more interested in short term gain.
Although building a ground and flogging off the club before you depreciate the asset on the books could work...
The loan to ACL was made commercially at 5% as per the judicial review. It was examined and concluded that CCC acted as an existing investor to ACL in order to protect the assets.
This is key to understand how a new stadium could be partly financed without leaving a too much of an interest burden.
I'm not sure you can apply the same process to a new stadium build as the Ricoh anyway. You won't get Tesco pumping millions in or any other similar store so what are the alternatives or do we just look for something as cheap as possible.
We need to know what we're talking about in terms of annual loan repayments on a new stadium to be able to compare against the Ricoh. If we have to pay £1m a year for a new stadium but £100K rent at the Ricoh then unless we're making over £900K extra profit it all seems a little pointless, ignoring the issues around Wasps rebranding the stadium.
I don't see the benefit either way, the club needs more money, a stadium that loses more money than paying rent provides less money which is bad financially and sporting wise. This isn't Arsenal where there is short just term pain for long term gain, this new stadium plan is just pain.
how is it good short term? the building of the stadium is the really difficult bit financially, the money they have to borrow for the building part has no security and will be very expensive, 30mill for 2 years at 20% interest is 6million pounds.Then they get to sell leases and get a long term reasonable rate interest.
Obviously the club with a stadium is worth much more than the club without a stadium but is the club with a stadium really worth more than the club without a stadium + the cost of building said stadium? I doubt it very very much indeed.
And is, I suppose (being charitable, and running with this for the sake of an argument) why you employ consultants but don't approach councils for planning permission just yet, as you'd hope to buy land cheap, and then get the permission to increase its value, as opposed to alerting potential rivals for land with use now beyond sheep.
(I appreciate before anyone jumps on me that this is a bit clutching at straws, but I look forward to our new ground at Burton Dassett)
how is it good short term?
Obviously the club with a stadium is worth much more than the club without a stadium but is the club with a stadium really worth more than the club without a stadium + the cost of building said stadium? I doubt it very very much indeed.
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