Wasps downward spiral... (67 Viewers)
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Grendel
Well-Known Member
Whose? Mine?
Nick
Administrator
Yeah.
Grendel
Well-Known Member
Well no as Italia is a Wasps fan
I am just offering an opinion based on Financials and likely re-funding that they are not going to be leaving the City anytime soon.
The interesting thing is if we really believe we are building a new ground we must have a plan for the Financial backing that requires. In that case and given it seems Wasps are desperate and Derek Richardson needs his money back why do the owners not make a bid for the shares that own the lease.
We all know the answer and why.
duffer
Well-Known Member
It's an interesting opinion, but politely, I don't think it necessarily adds up. I don't think Wasps going down would pull us down, and in fact I think it would put us in a much stronger position if we did want to negotiate a deal on the lease with the ultimate lease holder (be that another company or the Council).
Having read again the Wasps bond prospectus, it looks to me like if Wasps go bust, the lease might well revert to the Council, though it could well become mired in legal wrangling (for once, without the club being directly involved!).
Either way though, I don't see that we'd get booted out, we'd then be the primary income source for whomever does take the lease over. And we'd also be the only obvious party who'd be interested in renting the ground.
I'm not saying this ends up with us owning the ground but it's not obvious to me how Wasps going pop ends up with us getting a worse deal than the one we've already got.
Wasps remain bullish about being able to refinance the bond. But money's tighter now than ever it was and by definition they would be a bigger risk having failed to pay it off without further borrowing. There's no way I can see of them refinancing it on better terms than the existing bond, which in itself puts their ongoing business under pressure. Interesting times ahead.
Flying Fokker
Well-Known Member
Good old Sisu.
Flying Fokker
Well-Known Member
If nothing else we would offset running costs to a degree.
Flying Fokker
Well-Known Member
Tim Fisher would like that comment! Brings to mind ‘We are the only show in town’.
Brighton Sky Blue
Well-Known Member
I don’t think he would.
FulltimeWum
Well-Known Member
I enjoy ploughing through a mundane PDF as much as anyone, but that one is over 200 pages long. Any edited highlights?
Grendel
Well-Known Member
Richardson can retain total control if he wants to
duffer
Well-Known Member
Mate, compared to those judicial review documents that prospectus is like a haiku. Where's your staying power?
Just for you then....
The bond issue fails,
As the franchise falls apart,
Flags and fireworks, end.
duffer
Well-Known Member
Absolutely. As long as he's willing and able to keep throwing money at a loss making business.
Given part of the reason for the bond was to pay him back (circa 10m, iirc), that might be in doubt.
And either an expensive refinancing of the bond, or a failure to refinance and a default, would really make him have to dip into his pockets.
Losses would increase in the first case, and profits would greatly reduce in the latter (with the benefits of the lease going elsewhere).
Financially, they're in a very tight spot, imho.
Yet the bond has recovered to near full value.
10000 were traded recently.
fernandopartridge
Well-Known Member
I agree with G, would love the gratification of them going bust but it isn't going to happen.
I think they'll refinance the bond, at the end of the day they've met all the interest payments and that's good enough for the investors in these markets. Whilst their own gates are in decline, they now have a long term deal in place with the football club which is currently going in the opposite direction.
I can't remember the entire implications of a default but the bondholders have the first legal charge over the lease which I believe is precedent over CCC.
I think they'll refinance the bond, at the end of the day they've met all the interest payments and that's good enough for the investors in these markets. Whilst their own gates are in decline, they now have a long term deal in place with the football club which is currently going in the opposite direction.
I can't remember the entire implications of a default but the bondholders have the first legal charge over the lease which I believe is precedent over CCC.
duffer
Well-Known Member
I think it's at about 89 now, original price 100. But it matures in May, so I believe there's only one interest payment left. I stand to be corrected, but I think that means if you bought at 89 now, then in May you'd get 103.25.
That, of course, assumes that the bond can be fully repaid. If you were confident of that, it's not a bad return. The price, to me at least, suggests that there's not complete confidence.
I'm obviously not neutral, but I wouldn't touch it with a bargepole. The downside risk is much bigger than the upside benefit, I'd suggest. Others will differ though, I'm sure. We'll soon see...
duffer
Well-Known Member
I'm not sure I'd be quite as confident. The first bond was about making Wasps the biggest team in Europe and investing heavily in the team to increase profits. It hasn't worked, and they've had to go back to investors to loosen the earnings covenants (and hence, the mitigation against loss). Not a good look for future neutral investors, surely.
And how do they sell a second bond, most of it will be used to repay the first? It's akin to paying your mortgage with your credit card, unsustainable in the long term.
Additionally, I haven't read anything that says the bondholders take precedence over the Council; the prospectus states that the lease could revert to the Council if there's an insolvency event. It's definitely not clear cut either way from what I can see.
The one thing I would agree with is that Richardson is the key player here. If he tires of putting his hand in his pocket, I think Wasps could be done. One can only hope, of course.
duffer
Well-Known Member
And having read that last one again, it feels a bit mean-spirited.
I don't really want Wasps to completely fail, that would be harsh on their genuine fans and the players and staff that have no blame attached.
The ideal solution is for them to go approximately back to where they came from. I don't think they'd get many from Coventry travelling in the other direction to support them, mind...
I don't really want Wasps to completely fail, that would be harsh on their genuine fans and the players and staff that have no blame attached.
The ideal solution is for them to go approximately back to where they came from. I don't think they'd get many from Coventry travelling in the other direction to support them, mind...
Gynnsthetonic
Well-Known Member
Where to though, would Wycombe welcome them back or play at Wimbledon, Barnet, not all teams would welcome a full time Rugby Club, and what about the Henley in Arden training centre
Terry Gibson's perm
Well-Known Member
Looking at their current crowds I would think that Coundon Park would be big enough as the memorial park would be way to big for them
chiefdave
Well-Known Member
If they did decide to move back to London I don't think the training ground is much of an issue. They took over an existing facility and as much as they claim its 'state of the art' there's not that much that has changed since it was a community facility. Could easily be reverted back to its former use which I'm sure the community would welcome.
Peter Billing Eyes
Well-Known Member
With Oxford United’s plans for a new stadium, the Kassam could be looking for a new occupant. Surely that would suit Wasps’ demographic and with only 3 stands is more than big enough for them. They could probably retain their Henley In Arden training centre as well?
Earlsdon_Skyblue1
Well-Known Member
Do us a favour and email that idea to Wasps HQ!
Grendel
Well-Known Member
why would they move to London when they have a 250 year lease and a football club paying I assume over a million a year in rent?
I’d have a guess it’s because the project hasn’t and won’t work and nobody is interested in their product (the rugby).
If they stay here then it’s for outside rugby business reasons and would say it all that the rugby side of the project is secondary.
If they want the rugby team to succeed long term then in my opinion they need to go back to their routes. (London)
Everyone I speak to regarding London wasps has nothing but pure hatred for them. Their not wanted here and never will be.
D
Deleted member 5849
Guest
But that's the whole reason they moved here in the first place.
Grendel
Well-Known Member
So it’s worth surrendering a £60 million pound business which would ruin Richardson - whose buying it?
He’s going to be bust at their losses!
chiefdave
Well-Known Member
Hence the if, I was responding to Gynnsthetonic's comment not saying they're going to up and move tomorrow.
Grendel
Well-Known Member
I don’t love them I’m just pragmatic and actually have a brain not just tub thumping rhetoric - the council gave them a free pass for life with a 250 year lease - also their crowds are no worse than when near London - blame the council - I’m just bored of the ignorant nonsense on here. The council and also dimwit Joy created this monster and it’s going nowhere
Grendel
Well-Known Member
What the fuck are you on about - the Sisu bank is owed more than Richardson in capital and interest and has zero assets - we are a bankrupt basket case
Grendel
Well-Known Member
well they never will move
I’m sure you only come on here to take your frustrations out because your not allowed to answer your missus back.
Grendel
Well-Known Member
I think it’s the other way round - you are thick and talk shite you can’t even respond intelligently to anything I put to you. How much is the lease worth?