When will Sisu go? (2 Viewers)

Irish Sky Blue · Mar 31, 2015

Reading comments on here, listening to callers on the radio and to fans at the games, it seems to be an almost universal feeling that Sisu need to go. There are few who think that they have been anything but an unmitigated disaster for our club. Listening to Chris Cattlin the other week was great. He didn't hold back and his contempt for the incompetents in charge of our club could be heard loud and clear. One of the messages of hope that he repeated several times is that things will change, at some time in the future, Joy, Tim and their mates will be packed up and gone. At the moment there is no sign of this happening. My question would be, when do other City fans see them leaving? Will they be gone in a couple of years or will they be here for another 7? As I read somewhere else, the one thing that is certain is that with each day that passes we are another day closer to them being gone and to us having our club back in whatever form they have left it.

Skyblueweeman · Mar 31, 2015

Until someone shows an interest in buying us, and I mean serious interest, not clowns like Byng, Hoffman, Yankie IV or whatever he was called, they'll be here for a while.

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stupot07 · Mar 31, 2015

Skyblueweeman said:
Until someone shows an interest in buying us, and I mean serious interest, not clowns like Byng, Hoffman, Yankie IV or whatever he was called, they'll be here for a while.

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Agreed. Can't see them going any time soon, unfortunately.

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chiefdave · Mar 31, 2015

There's two scenarios I can see them leaving in. The first is somehow they get their money back (or at least the amount they deem acceptable to walk away with). That would either need to be through someone buying us and paying us off, which seems highly unlikely given the state the club is in and the ground situation, or the club generating enough profit, again highly unlikely.

The other is that the club can't be run at break even and they make a decision to stop covering the losses. Here we again either need someone to buy us, possibly after another round of administration. If SISU go down this road and there isn't a buyer we've got huge problems.

The Gentleman · Mar 31, 2015

If we go into admin I'm sure there will always be a buyer. Question is will it be more of the same. For me though, I couldn't give a shit now as I just want Sisu to fuck off. If a new buyer turns out the same as Sisu then what have we lost but I doubt that there is much worse than them.

Irish Sky Blue · Mar 31, 2015

The Gentleman said:
If we go into admin I'm sure there will always be a buyer. Question is will it be more of the same. For me though, I couldn't give a shit now as I just want Sisu to fuck off. If a new buyer turns out the same as Sisu then what have we lost but I doubt that there is much worse than them.

I feel the same. Can't be any worse and with a bit of luck someone who has a genuine feeling for the club and the City.

SkyBlueSid · Apr 1, 2015

We desperately need a buyer, we all know that. I think that Sisu will be gone sooner rather than later. What worries me is whether they will leave behind anything that resembles a professional football club.

Paxman II · Apr 1, 2015

Look we all need to drop this death wish. We are already on the brink and there is no more likely a buyer of our club in it's current position than me getting on with Taylor Swift.

They will go when they claw us back to promotion levels in the championship with some sort of stadia certainty. Probably still the Ricoh in some share capacity.

That aside since dropping to league 1 and not trying to defend them for all past stupidity - but are they doing a lot worse than any other club in this league in terms of spend, choice of manager, sacking the one that was no good? They didn't get rid of Carl Baker the silly Scots laddy did. It looks to me apart from silly squabbles over the club shop and other minor indiscretions they are trying to put things right or at least attempting to finally because it is their only exit route.
So be careful what you wish for. They are propping up the club that by all rights was a dead cause 12 months ago.
With TM they have done well and they must know they have to back him next season if they want that exit route.
I can't see how anything better could happen for us right now. I don't think they want to be here a day longer than we want them here but they are canny and I certainly don't want them to walk away at this moment in time because there will be no credible alternative.

I think we have to cut them some slack for now and support TM and the team.

SkyBlue_Bear83 · Apr 1, 2015

chiefdave said:
There's two scenarios I can see them leaving in. The first is somehow they get their money back (or at least the amount they deem acceptable to walk away with). That would either need to be through someone buying us and paying us off, which seems highly unlikely given the state the club is in and the ground situation, or the club generating enough profit, again highly unlikely.

The other is that the club can't be run at break even and they make a decision to stop covering the losses. Here we again either need someone to buy us, possibly after another round of administration. If SISU go down this road and there isn't a buyer we've got huge problems.

There will be a buyer I'm pretty sure of that, problem is with a club in our state they will probably be another bunch of clowns and shitbags like SISU. None of the serious players would look twice at our club.

rupert_bear · Apr 1, 2015

Well I was assured some weeks back something along these lines were happening, no details so no point posting anything on here, but since then we have had the accounts and splitting them remember into two bits £14 million and a debt of was it 50 million, so is 14 mill a come and get it if you want it price ? Then there's all these short contracts including the new manager, can we read something into that, then there's the appointment of Tony Mowbray, what attracted him ? Waggott ! doubt it and who put the 13 week short contract in him, sisu or a third party based on what division we are in, wouldn't mean we would not be bought but the price could be a lot different, , lots of perhaps, ifs or maybes but one thing is certain sisu cannot continues as we are, losing an estimated £200k a week (according to football finance expert the other week).

Thenose · Apr 1, 2015

There is always someone willing to buy, but what the problem is price. What's CCFC worth, what will SISU sell for?

Godiva · Apr 1, 2015

rupert_bear said:
Well I was assured some weeks back something along these lines were happening, no details so no point posting anything on here, but since then we have had the accounts and splitting them remember into two bits £14 million and a debt of was it 50 million, so is 14 mill a come and get it if you want it price ? Then there's all these short contracts including the new manager, can we read something into that, then there's the appointment of Tony Mowbray, what attracted him ? Waggott ! doubt it and who put the 13 week short contract in him, sisu or a third party based on what division we are in, wouldn't mean we would not be bought but the price could be a lot different, , lots of perhaps, ifs or maybes but one thing is certain sisu cannot continues as we are, losing an estimated £200k a week (according to football finance expert the other week).

We're not losing 200k/week. Arvo injected £1.5m (as equity) in pre season and according to TF the club hasn't received more.

One thing to remember - if the club is an attractable acquisition to others, it's probably equally attractive to the owners to keep. One exception though - if wasps/acl made a combined and sustainable profit they could probably make more from buying and investing in the club than any other party (including current owners). Unfortunately they don't and it would be reckless for them to take over the club for at least a couple of years.

The debt level to ARVO is £8m plus accrued interests £3m totalling £11m. I have no idea if offering that kind of money would be enough for sisu/arvo, and anyway that would be way over the top and no one would pay that in the current situation. Maybe in a couple of years if the club is making a profit and a league higher.

stupot07 · Apr 1, 2015

rupert_bear said:
Well I was assured some weeks back something along these lines were happening, no details so no point posting anything on here, but since then we have had the accounts and splitting them remember into two bits £14 million and a debt of was it 50 million, so is 14 mill a come and get it if you want it price ? Then there's all these short contracts including the new manager, can we read something into that, then there's the appointment of Tony Mowbray, what attracted him ? Waggott ! doubt it and who put the 13 week short contract in him, sisu or a third party based on what division we are in, wouldn't mean we would not be bought but the price could be a lot different, , lots of perhaps, ifs or maybes but one thing is certain sisu cannot continues as we are, losing an estimated £200k a week (according to football finance expert the other week).

Losing £200k pw Lol

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Thenose · Apr 1, 2015

This comes down to simple maths for SISU

The factors being
Amount spent on project CCFC
Price someone would pay today
chances of getting promoted
chances of getting relegated
value of club +1 division
value of club -1 division
chances of winning legal action
potential award/compensation from legal action
cost of legal action
Face value
reputational value
buggerance value (how much time and effort expended presiding over the mess)

a maths professor from Warwick uni could probably put all these factors into a single equation. Just plug the figures In and you could arrive at the SELL/HOLD answer.

mrtrench · Apr 1, 2015

Nobody is going to pay what SISU would need to make a profit or break even. Hence the only time they will go is when they decide they have exhausted options to make their money and see only further losses ahead.

Thenose · Apr 1, 2015

I guess chances of promotion/relegation would be a huge weighting factor in terms of future losses/profits

Irish Sky Blue · Apr 1, 2015

A few weeks ago, before the departure of SP, it seemed that very few people would be renewing their season tickets. If We stay up, if Mowbray stays,if they put some money in so that he can make decent signings, then that situation may be reversed. If these factors don't come together then gates will fall even further and Sisu losses increase. I can't see how they are not losing money already. The shop, such as it I s is surely loss making (the market stall table on match days is pathetic, an embarrassment) decreasing match day revenue due to poor crowds mean less money on food and drink, car parks and ticket sales. Unless TM can engineer. an upturn on then pitch, their losses are likely to increase greatly. Why would they stay? Unless they genuinely make an effort to turn things around ( which will cost them more money short term), we will continue on our downward spiral which will ultimately mean more Sisu losses with an even less saleable asset. What is their strategy? Do they have one?

Godiva · Apr 1, 2015

mrtrench said:
Nobody is going to pay what SISU would need to make a profit or break even. Hence the only time they will go is when they decide they have exhausted options to make their money and see only further losses ahead.

It's that kind of thinking that make a few hope relegation would be 'the cure'. But I think sisu's strategy of making sure the club is independent of the owners (stop the constant stream of 'send more money' mails) would mean that relegation would be met with even more cost cuttings (more youngster).

On top of that - sisu themselves make their money from the investments they manage. Not from mythical 'management fee's' or other pay outs from the club. This mean they earn money just sitting there with the investments already made. By accruing the hefty interest rate to the loans and then converting to equity, the total investment increases without injecting real money. Increased investment = increased fee to sisu. They seem to have a nice little money maker going until the day they sell and have to write off the majority of the loans and hand over shares for next to nothing.

Ashdown · Apr 1, 2015

They will go when they have exhausted all legal avenues and when there isn't any benefit to them in creating tremendous admin/management charges and dumping them on the club.................or if some very rich people came along with a fat wad they'd like to throw at a bit of a folly !

Irish Sky Blue · Apr 1, 2015

Godiva said:
It's that kind of thinking that make a few hope relegation would be 'the cure'. But I think sisu's strategy of making sure the club is independent of the owners (stop the constant stream of 'send more money' mails) would mean that relegation would be met with even more cost cuttings (more youngster).

On top of that - sisu themselves make their money from the investments they manage. Not from mythical 'management fee's' or other pay outs from the club. This mean they earn money just sitting there with the investments already made. By accruing the hefty interest rate to the loans and then converting to equity, the total investment increases without injecting real money. Increased investment = increased fee to sisu. They seem to have a nice little money maker going until the day they sell and have to write off the majority of the loans and hand over shares for next to nothing.

I'm not an accountant so maybe I'm missing something. If money out is greater than money in (which is surely the case with Coventry City) then they are losing money on this particular "investment". With years of failure behind them and no turn around in sight, why not cut their losses and go?

mrtrench · Apr 1, 2015

Godiva said:
On top of that - sisu themselves make their money from the investments they manage. Not from mythical 'management fee's' or other pay outs from the club. This mean they earn money just sitting there with the investments already made. By accruing the hefty interest rate to the loans and then converting to equity, the total investment increases without injecting real money. Increased investment = increased fee to sisu. They seem to have a nice little money maker going until the day they sell and have to write off the majority of the loans and hand over shares for next to nothing.

I work in finance and I don't agree. They do not have a nice little money maker; they are losing money hand over fist and the debt to equity switch doesn't help that.

italiahorse · Apr 1, 2015

CCFC said:
There will be a buyer I'm pretty sure of that, problem is with a club in our state they will probably be another bunch of clowns and shitbags like SISU. None of the serious players would look twice at our club.

There will NEVER be a worse owner than SISU under Tim Fisher ... the owners that took us out of Coventry for their own personal gain and by using their well rehearsed bullying tactics.

However .... even they can learn from this.
Tony Mowbray is an indicator from them of the future.
Keep winning, keep us up and then put a winning team together that challenges for the top.
Sacrifice Tim Fisher and we just might get over it.

Godiva · Apr 1, 2015

Irish Sky Blue said:
I'm an accountant so maybe I'm missing something. If money out is greater than money in (which is surely the case with Coventry City) then they are losing money on this particular "investment". With years of failure behind them and no turn around in sight, why not cut their losses and go?

Yes, cash flow is the key. But as long as there is income there's a point where cash flow is either neutral or positive. I think they planned for another season at Sixfields and set the cost accordingly - at least they were forced to by SMCP. I don't have the insight to know if the preseason £1.5m injection in form of equity was to counter the SMCP or to bankroll the club in a period with no income - or both. In any case the costs have been cut greatly through the previous season.
The returning to the Ricoh with increased attendances from 2k to 7k per game will have lifted the income greatly - and possibly to the point of cash flow neutral/positive (then accrued interests and depreciation will likely pull the overall result to negative).

So my guess is the club is now close to be independent of the owners (the sacking of SP and bringing in TM being the unknown factor).

Godiva · Apr 1, 2015

mrtrench said:
I work in finance and I don't agree. They do not have a nice little money maker; they are losing money hand over fist and the debt to equity switch doesn't help that.

Are they? Losing money hand over fist? How can you be so sure?
They don't really own the club - it's not there own investments. They 'manage' the investors money - it's not their own.
As a hedge fund they will take a percentage of the 'assets' they manage.

mrtrench · Apr 1, 2015

Godiva said:
Are they? Losing money hand over fist? How can you be so sure?
They don't really own the club - it's not there own investments. They 'manage' the investors money - it's not their own.
As a hedge fund they will take a percentage of the 'assets' they manage.

The fund used to have cash, which would have full value on the balance sheet. The loans may also be leveraged through borrowing money - a liability on the balance sheet. They now have badly performing loans that aren't being repaid and debt that has been converted to equity with zero value. The loans will have had to be written down - so the amount written down is a debit to P/L (a loss). The debt that is now equity will have almost certainly be fully written down as a loss as nobody could value the club at much more than zero value. So, once they took a percentage on assets of value x and now they are taking a percentage of (x minus a lot).

Irish Sky Blue, although I work in finance I'm not an accountant. Anything I missed?

mrtrench · Apr 1, 2015

And before you say it, no they are not delighted to be able to write down against tax.

Godiva · Apr 1, 2015

mrtrench said:
The fund used to have cash, which would have full value on the balance sheet. The loans may also be leveraged through borrowing money - a liability on the balance sheet. They now have badly performing loans that aren't being repaid and debt that has been converted to equity with zero value. The loans will have had to be written down - so the amount written down is a debit to P/L (a loss). The debt that is now equity will have almost certainly be fully written down as a loss as nobody could value the club at much more than zero value. So, once they took a percentage on assets of value x and now they are taking a percentage of (x minus a lot).

Irish Sky Blue, although I work in finance I'm not an accountant. Anything I missed?

Maybe you missed the small detail of where ARVO have their registered address - the Cayman Islands.
To me that indicate a different accounting ethic. I don't think the £8m loan or the £3m accrued interest has been written down. Anyway, the loans are not defaulted - are they? So they don't need to write them down. And valuation of the club ... well, as the shares are not traded there's no indicator of 'market value' to use as a guide. It's very much up to themselves to decide the valuation - right up to the day the shares are sold.

rupert_bear · Apr 1, 2015

stupot07 said:
Losing £200k pw Lol

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I may have quoted this expert incorrectly, I think he said it is costing around £200k a week to run the club I assume wages and other costs and he said we are getting nothing like that sum into the club. Only quoting this so-called football finance expert. But for certain we, we being sisu are spending out a lot more than is coming in.

mrtrench · Apr 1, 2015

Godiva said:
Maybe you missed the small detail of where ARVO have their registered address - the Cayman Islands.
To me that indicate a different accounting ethic. I don't think the £8m loan or the £3m accrued interest has been written down. Anyway, the loans are not defaulted - are they? So they don't need to write them down. And valuation of the club ... well, as the shares are not traded there's no indicator of 'market value' to use as a guide. It's very much up to themselves to decide the valuation - right up to the day the shares are sold.

I disagree, based upon my knowledge of finance. I'll let accountants comment on the rest but let me make this point. If they are cooking the books so obviously and you were an investor, who are high net worth and almost certainly have their own accountants, would you sit quietly and continue to pay 5% + management fee on such a trumped up dishonest accounting methodology? And if you were an auditor would you sign off and risk your name on that?

Godiva · Apr 1, 2015

mrtrench said:
I disagree, based upon my knowledge of finance. I'll let accountants comment on the rest but let me make this point. If they are cooking the books so obviously and you were an investor, who are high net worth and almost certainly have their own accountants, would you sit quietly and continue to pay 5% + management fee on such a trumped up dishonest accounting methodology?

Why is it dishonest?

Covkid1968# · Apr 1, 2015

Thenose said:
This comes down to simple maths for SISU

The factors being
Amount spent on project CCFC
Price someone would pay today
chances of getting promoted
chances of getting relegated
value of club +1 division
value of club -1 division
chances of winning legal action
potential award/compensation from legal action
cost of legal action
Face value
reputational value
buggerance value (how much time and effort expended presiding over the mess)

a maths professor from Warwick uni could probably put all these factors into a single equation. Just plug the figures In and you could arrive at the SELL/HOLD answer.

Might have to be Cov Uni - given that Warwick seem to think they are not a Coventry Uni sometimes!

Ashdown · Apr 1, 2015

Godiva said:
Why is it dishonest?

You talk about their methodology and their hiding behind alternative finance laws in the Cayman Islands like it's all just fine and dandy. It's exactly the uncertainty that their devious practises invoke that is proving a huge turn off to many fans who would give more loyalty in return for more transparency and honesty !

stupot07 · Apr 1, 2015

rupert_bear said:
I may have quoted this expert incorrectly, I think he said it is costing around £200k a week to run the club I assume wages and other costs and he said we are getting nothing like that sum into the club. Only quoting this so-called football finance expert. But for certain we, we being sisu are spending out a lot more than is coming in.

That makes more sense, losing £10.4m a year didn't! To be fair though the expert was basing that on playing at Sixfields infront of 2k paying 2/3rds the ticket price, no real shirt sponsors and a large player wage bill. I doubt we're even paying £200k a week now let alone losing it.

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Godiva · Apr 1, 2015

Ashdown said:
You talk about their methodology and their hiding behind alternative finance laws in the Cayman Islands like it's all just fine and dandy. It's exactly the uncertainty that their devious practises invoke that is proving a huge turn off to many fans who would give more loyalty in return for more transparency and honesty !

No, that's not my point. Valuation is not exact science and there's no law demanding the write down of loans that are fully serviced and not defaulted.

The point I try to make is that the whole idea of sisu losing money is not true. In fact they make money. The club is close to cash flow neutral - if not already. So the need for more investments/loans are limited if there at all.
The interesting paradox is that those most vocal in demanding sisu out also were the most vocal in wanting the club back to the Ricoh. Coming back provided a better financial standing for the club and keeps sisu here for a longer time.
Then surely we can press more for people to stay away? Forgetting that wanting the club back and then ask people to stay away is ... 'strange', the only thing that will accomplish for certain is less money and support for the team. The club will struggle to be competitive and promotion is unlikely in that situation. But - sisu will still make money from the investors! NOPM, Sisu-Out - whatever campaign you can create - none of that will deprive sisu their income, but the club will continue to struggle.

Irish Sky Blue · Apr 1, 2015

mrtrench said:
The fund used to have cash, which would have full value on the balance sheet. The loans may also be leveraged through borrowing money - a liability on the balance sheet. They now have badly performing loans that aren't being repaid and debt that has been converted to equity with zero value. The loans will have had to be written down - so the amount written down is a debit to P/L (a loss). The debt that is now equity will have almost certainly be fully written down as a loss as nobody could value the club at much more than zero value. So, once they took a percentage on assets of value x and now they are taking a percentage of (x minus a lot).

Irish Sky Blue, although I work in finance I'm not an accountant. Anything I missed?

My post should have said that I am not an accountant, now edited, sorry. To be honest, most of the financial stuff is beyond me. There seems to be differing perceptions of whether they are losing money or not. There biggest income must be season tickets.Match day revenue can't be great. As of yet, no major player sale and none really on the horizon to rival that of Callum Wilson. No cup run this year with Arsenal like attendance. Next years season ticket sales figures at best in the balance depending on the TM factor, but very dodgy if he goes. I can't see how they are not losing or a likely to be losing money. If, as Godiva says income and outgoings are balanced then I suppose you can see why there is no rush for them to go.

When will Sisu go? (2 Viewers)

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