Who will own the new stadium? (1 Viewer)

shmmeee · Jan 10, 2014

Godiva said:
Maybe - TF said at the fans forum financing will be a mix of equity and loans and selling off leases to other businesses.
Only loans will carry interest and the rate depends on the soundness of the company.

Wouldn't we loan from Sisu funds as before?

Would there be a benefit to going outside the Sisu group? I'd assume ARVO are giving us the best terms available, otherwise what's the point?

Would Sisu want to keep all debts in one place. What would happen if we got debt secured against the stadium then went bust? Would the bank have first dibs as unsecured creditor? Surely that defeats the point of this whole exercise?

Edit: just seen "not a bank". So is it safe to assume same terms as the current ARVO loans?

Godiva · Jan 10, 2014

Rusty Trombone said:
Cheap wise cracks, that's a low blow. I guess if ACL could go back in time they would accept lowering the rent, it would be good to see how it would have played out.

I think the only option SISU are chasing is the sale of an asset, all their eggs are in the JR case, they need to get hold of something cheap to generate some profit. Playing the long game building a ground and slowly turning around the fortunes of the club isn't their thing as far as I can see. This is a waiting game, as long as SISU can kid their investors that the prize is still available, then the investors will keep paying their management fees, and the clubs debt will keep increasing.

As the chap in 'The Office' said there's no good news, just bad news and irrelevant news.

How many times have that been said the past 6 years?
In fact we have a proven record of not being able to predict them.
'They will be gone shortly'
'They won't liquidate the club'
'They will sell as part of the administration'
'They will sell all the best players i the summer'
'Pressley won't be supported'
and now ...
'They won't build a new stadium'

shmmeee · Jan 10, 2014

Godiva said:
How many times have that been said the past 6 years?
In fact we have a proven record of not being able to predict them.
'They will be gone shortly'
'They won't liquidate the club'
'They will sell as part of the administration'
'They will sell all the best players i the summer'
'Pressley won't be supported'
and now ...
'They won't build a new stadium'

To be fair though, all of that is the past year.

Godiva · Jan 10, 2014

shmmeee said:
Wouldn't we loan from Sisu funds as before?

Would there be a benefit to going outside the Sisu group? I'd assume ARVO are giving us the best terms available, otherwise what's the point?

Would Sisu want to keep all debts in one place. What would happen if we got debt secured against the stadium then went bust? Would the bank have first dibs as unsecured creditor? Surely that defeats the point of this whole exercise?

Edit: just seen "not a bank". So is it safe to assume same terms as the current ARVO loans?

I don't know if the terms would be the same. We are paying a relatively high interest rate on the initial ARVO loan as the club was severely distressed then.
Maybe stadium loans would be cheaper if ARVO believed the case was less risky?

shmmeee · Jan 10, 2014

Godiva said:
I don't know if the terms would be the same. We are paying a relatively high interest rate on the initial ARVO loan as the club was severely distressed then.
Maybe stadium loans would be cheaper if ARVO believed the case was less risky?

Yeah, I thought that after I posted. Cheers for walking me through it.

letsallsingtogether · Jan 10, 2014

Come on their a money making business no such thing as a cheaper loan got to repay the investors.

Godiva said:
I don't know if the terms would be the same. We are paying a relatively high interest rate on the initial ARVO loan as the club was severely distressed then.
Maybe stadium loans would be cheaper if ARVO believed the case was less risky?

Rusty Trombone · Jan 10, 2014

Godiva said:
How many times have that been said the past 6 years?
In fact we have a proven record of not being able to predict them.
'They will be gone shortly'
'They won't liquidate the club'
'They will sell as part of the administration'
'They will sell all the best players i the summer'
'Pressley won't be supported'
and now ...
'They won't build a new stadium'

The club have been losing money every year. The club will lose money this year, and the club will lose money every year when they are not in Coventry. When they get to Coventry (area), the club will lose money as they will be paying for the cost of a new stadium (this won't happen soon as they have lied about land approaches). There is no future for the club as long as SISU's investors believe they will get a return.

shmmeee · Jan 10, 2014

I wonder what our outgoings are this season.

There's virtually nothing left to cut. We don't pay for any stadium related staff. Just the rent, wages, Ryton and the coaching/medical/admin staff. And we've got a grand total of one non-academy graduate not in the first team (who's on his way out) and only 7 in the entire squad (not counting youngsters like Urquhart or Slager).

This has to be as cheap as it gets without damaging chances of promotion (can you name any high wage players we could lose and not ruin promotion chances?). What do you reckon our break even figure is?

Grendel · Jan 10, 2014

Rusty Trombone said:
The club have been losing money every year. The club will lose money this year, and the club will lose money every year when they are not in Coventry. When they get to Coventry (area), the club will lose money as they will be paying for the cost of a new stadium (this won't happen soon as they have lied about land approaches). There is no future for the club as long as SISU's investors believe they will get a return.

When was the last year when Coventry city was profitable?

bigfatronssba · Jan 10, 2014

Grendel said:
When was the last year when Coventry city was profitable?

Would it not be 2004, the year before the council started "bleeding us dry"?

letsallsingtogether · Jan 10, 2014

Good one I like it....

bigfatronssba said:
Would it not be 2004, the year before the council started "bleeding us dry"?

Godiva · Jan 10, 2014

shmmeee said:
I wonder what our outgoings are this season.

There's virtually nothing left to cut. We don't pay for any stadium related staff. Just the rent, wages, Ryton and the coaching/medical/admin staff. And we've got a grand total of one non-academy graduate not in the first team (who's on his way out) and only 7 in the entire squad (not counting youngsters like Urquhart or Slager).

This has to be as cheap as it gets without damaging chances of promotion (can you name any high wage players we could lose and not ruin promotion chances?). What do you reckon our break even figure is?

That is surely a question for OSB, but I think you are right about the cost being as low as can be. Sadly the income has come down just as much. Income from the FA cup and especially the upcoming Arsenal match will help, but the fact we are still under FFP embargo says we are some way off break even.

skybluefred · Jan 10, 2014

Godiva said:
You miss the point I think - as long as an outside company (outside SBS&L) make a profit, no matter how small or how big, that profit is not benefitting the club.
You can offer reduced rent to the club that will of course benefit the club, but if ACL stlll make a profit due to optimized businessplan and cost saving meassures - that profit is not benefitting the club. The only situation where every penny generated by the stadium is benefitting the club is where ACL is owned by SBS&L.

You miss the point I think-if SBS&L or any of the other sisu fantasy companies own the stadia the only people
profiting will be sisu and their investors.

Grendel · Jan 10, 2014

bigfatronssba said:
Would it not be 2004, the year before the council started "bleeding us dry"?

You may be happy with the councils role in this debacle - I'm not

Godiva · Jan 10, 2014

skybluefred said:
You miss the point I think-if SBS&L or any of the other sisu fantasy companies own the stadia the only people
profiting will be sisu and their investors.

You mean 'the owners'?

Rusty Trombone · Jan 10, 2014

Grendel said:
When was the last year when Coventry city was profitable?

No idea, I would guess at either 1987, or one of the early years when Sky got involved.

Grendel · Jan 10, 2014

Godiva said:
You mean 'the owners'?

Minor detail.

Rusty Trombone · Jan 10, 2014

shmmeee said:
I wonder what our outgoings are this season.

There's virtually nothing left to cut. We don't pay for any stadium related staff. Just the rent, wages, Ryton and the coaching/medical/admin staff. And we've got a grand total of one non-academy graduate not in the first team (who's on his way out) and only 7 in the entire squad (not counting youngsters like Urquhart or Slager).

This has to be as cheap as it gets without damaging chances of promotion (can you name any high wage players we could lose and not ruin promotion chances?). What do you reckon our break even figure is?

The playing side will be the lowest for years, but the interest and management charges will be pretty high. I would say it's impossible to get to a reasonable guess of break even.

Hobo · Jan 10, 2014

PAY DAY LOAN To ARVO WRONGA.COM. Will be in debt for years, our club will be eternally broke

Godiva · Jan 10, 2014

Rusty Trombone said:
The playing side will be the lowest for years, but the interest and management charges will be pretty high. I would say it's impossible to get to a reasonable guess of break even.

The management fee is a financial instrumet to adjust/distribute cost through the group. It is not money being paid to sisu or the management of the club.

Hobo · Jan 10, 2014

Godiva said:
The management fee is a financial instrumet to adjust/distribute cost through the group. It is not money being paid to sisu or the management of the club.

Hedge funds normally take a an introductory fee then a further cut of the over all pot. They bite the cherry from both sides so to speak. But management fees can go to them also. As long as they have punters their cut is secure.

Rusty Trombone · Jan 10, 2014

Godiva said:
The management fee is a financial instrumet to adjust/distribute cost through the group. It is not money being paid to sisu or the management of the club.

How does the club benefit from this?

Godiva · Jan 10, 2014

Hobo said:
Hedge funds normally take a an introductory fee then a further cut of the over all pot. They bite the cherry from both sides so to speak. But management fees can go to them also. As long as they have punters their cut is secure.

Usually hedge funds are paid by their investors - they don't take money from the companies they run.
The management fees often quoted on this site relates to the cost distribution between SBS&L, ccfc holdings and ccfc ltd.
It was cost neutral as well as cash flow neutral for the group.

Godiva · Jan 10, 2014

Rusty Trombone said:
How does the club benefit from this?

Say SBS&L is billed for cost that really should be shared with Holdings and Limited - then once a year as the books are being closed the cost is distributed as a 'management fee'. It only takes one posting instead of maybe hundreds.

Grendel · Jan 10, 2014

Sky Blue Kid said:
@ Nick....If a post is made that is anti-SISU, you are one of the first to respond in a way that makes you appear to try to "Smooth the waters" on their behalf. Don't take my word on it...Ask others!

Shall we ask others what they think of you and your posts?

Rusty Trombone · Jan 10, 2014

Godiva said:
Say SBS&L is billed for cost that really should be shared with Holdings and Limited - then once a year as the books are being closed the cost is distributed as a 'management fee'. It only takes one posting instead of maybe hundreds.

Is this the complicated Group structure they were complaining about?

Godiva · Jan 10, 2014

Rusty Trombone said:
Is this the complicated Group structure they were complaining about?

It's quite normal for groups to distribute cost. It's not really complicated. It is even normal in a single company to distribute overheads on department level.

Jack Griffin · Jan 10, 2014

Godiva said:
Usually hedge funds are paid by their investors - they don't take money from the companies they run.
The management fees often quoted on this site relates to the cost distribution between SBS&L, ccfc holdings and ccfc ltd.
It was cost neutral as well as cash flow neutral for the group.

No OSB posted earlier that money appears to be flowing out of the group to pay ARVO loan interest, the charge was almost £1M in the last a year accounts were available for.

oldskyblue58 said:
Actually the 2012 SBS&L Group accounts show that £980,737 interest was actually paid out and in 2011 £465,112. I do not think the interest due to ARVO and any very short term lender is being rolled up, it looks like it is being paid over

Godiva · Jan 10, 2014

Jack Griffin said:
No OSB posted earlier that money appears to be flowing out of the group to pay ARVO loan interest, the charge was almost £1M in the last a year accounts were available for.

OSB is talking about interest on loans - not management fees.

Bluegloucester · Jan 10, 2014

The management fees have been accrued and if there were enough cash in the business it would flow up to Sisu.

Godiva · Jan 10, 2014

Bluegloucester said:
The management fees have been accrued and if there were enough cash in the business it would flow up to Sisu.

No not true. Again its overhead cost distributed to companies within the group. Like adminisraton cost (e.g. book keeping) paid by SBS&L but doing work also for holdings and limited. Their share of the cost is what is labelled management fee.

martcov · Jan 10, 2014

Godiva said:
No not true. Again its overhead cost distributed to companies within the group. Like adminisraton cost (e.g. book keeping) paid by SBS&L but doing work also for holdings and limited. Their share of the cost is what is labelled management fee.

Is the management fee itemised? e.g. "Bookkeeping"

skybluetony176 · Jan 10, 2014

Godiva said:
No not true. Again its overhead cost distributed to companies within the group. Like adminisraton cost (e.g. book keeping) paid by SBS&L but doing work also for holdings and limited. Their share of the cost is what is labelled management fee.

What ever they are spending on book keeping clearly isn't enough. They can't get their books in on time for toffee.

Bluegloucester · Jan 10, 2014

Check SBS&L accounts it is accrued and owed to Sisu.

Broken Hearted Sky Blue · Jan 10, 2014

Godiva said:
No not true. Again its overhead cost distributed to companies within the group. Like adminisraton cost (e.g. book keeping) paid by SBS&L but doing work also for holdings and limited. Their share of the cost is what is labelled management fee.

So for 5 years the accounts(book keeping) were "a mess" so what was the "administration cost" for:thinking about:

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