Why Did The Council Sell To Wasps? (2 Viewers)
- Thread starter torchomatic
- Start date
italiahorse
Well-Known Member
Nothing new here.
torchomatic
Well-Known Member
Don't disagree for once. It's like A CCC press release. My only surprise was the article wasn't written by A Lucas.
Good old CT though,eh?
Good old CT though,eh?
torchomatic
Well-Known Member
[h=2]Why wasn’t the Wasps deal offered to Coventry City FC?[/h]Putting aside restrictions created by commercial confidentiality, professional etiquette and any existing malice, it’s a valid question.
It’s certainly one which should be raised in any moral debate over who should have the right to operate the stadium which was, after all, built for Coventry City.
But the facts seem to indicate Coventry City’s owners would not have been interested in this deal even if it had been offered.
Football club owners Sisu claimed an existing £14.4million council loan to ACL in January 2013 was not commercially viable. The new loan terms as part of the Wasps deal involve the same level of repayment over half the time.
The Wasps deal also includes the retention of ACL, a desired outcome for the council. Sisu have long argued that ACL is not a viable business and therefore would seem unlikely to agree to any deal which did not involve dismantling the company.
[h=2]Why didn’t the council try to negotiate a separate deal with Sisu then?[/h]Because nobody seemed to be willing to negotiate - on any side.
Any meaningful negotiations over Sisu securing a share of ACL had fallen apart by August 2012. A High Court judge told us there was a “lack of appetite” from all parties to complete a deal at the time.
There doesn’t seem to be any indication that Sisu, The Alan Edward Higgs Charity or the council had had any serious talks about a new deal since then.
It’s also worth noting that successive owners of CCFC failed to negotiate a stake in the Ricoh Arena since 2005 - not just Sisu.
[h=2]Have Wasps been given a taxpayer asset on the cheap?[/h]The council retains the freehold ownership of the site, which means the stadium still belongs to the taxpayer. What has been sold is the right to operate the venue - although it could be argued that, as the lease is for 250 years, it is almost as good as owning freehold.
Wasps paid £5.54m for 100 per cent ownership of ACL. That comes against a backdrop of £400,000 losses in the company’s latest set of accounts after Coventry City FC had withdrawn its £1.3m annual rent.
The last publicly known bid for ACL was a £2m offer in 2012 from Sisu for the Alan Edward Higgs Charity’s half share in the company, which was not seriously pursued by either party. At that time, ACL was making a profit of £1.09m with CCFC’s £1.3m annual rent.
Based on those figures, the Wasps deal looks a very similar, if not better, deal to the one Sisu had attempted to negotiate in 2012.
Of course there has also been the introduction of the £14.4m council loan since then in January 2013. Wasps have agreed to take on the value of this loan, paying off £1m up front.
[h=2]Why did the council sell the Ricoh business to an out-of-town franchise?[/h]Again, there’s a moral argument to be had about whether Coventry City Council should have facilitated the move of a traditionally London-based rugby club even further away from its roots.
But, objectively speaking, the council has a duty to protect, and work towards the best interest of, its own taxpayers.
It seems clear to most that the introduction of a top-flight rugby side will boost the city’s economy and profile.
Continuing to look at the issue in black and white, the council has a duty to protect taxpayers money and it’s obvious ACL was struggling without Coventry City’s £1.3million annual rent.
With this in mind, the council was open to negotiations with interested parties who might be able to solidify and develop the Ricoh Arena business - and Wasps came knocking in early 2014 when there were no other offers on the table.
This is against a background where successive owners of Coventry City FC had failed to produce a serious bid for ACL in the nine years since the Ricoh Arena was built.
Wasps seemingly made a good business case for the move, which they say they needed to make in order to survive.
It’s certainly one which should be raised in any moral debate over who should have the right to operate the stadium which was, after all, built for Coventry City.
But the facts seem to indicate Coventry City’s owners would not have been interested in this deal even if it had been offered.
Football club owners Sisu claimed an existing £14.4million council loan to ACL in January 2013 was not commercially viable. The new loan terms as part of the Wasps deal involve the same level of repayment over half the time.
The Wasps deal also includes the retention of ACL, a desired outcome for the council. Sisu have long argued that ACL is not a viable business and therefore would seem unlikely to agree to any deal which did not involve dismantling the company.
[h=2]Why didn’t the council try to negotiate a separate deal with Sisu then?[/h]Because nobody seemed to be willing to negotiate - on any side.
Any meaningful negotiations over Sisu securing a share of ACL had fallen apart by August 2012. A High Court judge told us there was a “lack of appetite” from all parties to complete a deal at the time.
There doesn’t seem to be any indication that Sisu, The Alan Edward Higgs Charity or the council had had any serious talks about a new deal since then.
It’s also worth noting that successive owners of CCFC failed to negotiate a stake in the Ricoh Arena since 2005 - not just Sisu.
[h=2]Have Wasps been given a taxpayer asset on the cheap?[/h]The council retains the freehold ownership of the site, which means the stadium still belongs to the taxpayer. What has been sold is the right to operate the venue - although it could be argued that, as the lease is for 250 years, it is almost as good as owning freehold.
Wasps paid £5.54m for 100 per cent ownership of ACL. That comes against a backdrop of £400,000 losses in the company’s latest set of accounts after Coventry City FC had withdrawn its £1.3m annual rent.
The last publicly known bid for ACL was a £2m offer in 2012 from Sisu for the Alan Edward Higgs Charity’s half share in the company, which was not seriously pursued by either party. At that time, ACL was making a profit of £1.09m with CCFC’s £1.3m annual rent.
Based on those figures, the Wasps deal looks a very similar, if not better, deal to the one Sisu had attempted to negotiate in 2012.
Of course there has also been the introduction of the £14.4m council loan since then in January 2013. Wasps have agreed to take on the value of this loan, paying off £1m up front.
[h=2]Why did the council sell the Ricoh business to an out-of-town franchise?[/h]Again, there’s a moral argument to be had about whether Coventry City Council should have facilitated the move of a traditionally London-based rugby club even further away from its roots.
But, objectively speaking, the council has a duty to protect, and work towards the best interest of, its own taxpayers.
It seems clear to most that the introduction of a top-flight rugby side will boost the city’s economy and profile.
Continuing to look at the issue in black and white, the council has a duty to protect taxpayers money and it’s obvious ACL was struggling without Coventry City’s £1.3million annual rent.
With this in mind, the council was open to negotiations with interested parties who might be able to solidify and develop the Ricoh Arena business - and Wasps came knocking in early 2014 when there were no other offers on the table.
This is against a background where successive owners of Coventry City FC had failed to produce a serious bid for ACL in the nine years since the Ricoh Arena was built.
Wasps seemingly made a good business case for the move, which they say they needed to make in order to survive.
torchomatic
Well-Known Member
[h=2]But what about the city’s existing sports teams?[/h]Of course there’s a reasonable argument that Wasps’ arrival will damage existing teams in the city - particularly Coventry RFC.
Only time will tell, but the initial signs are that Cov are doing extremely well regardless and crowd numbers are up at Butts Park Arena. Wasps have also promised to work closely with Cov.
Coventry City seem to be faring less well, and most would argue that the Sky Blues owning the Ricoh Arena on reasonable terms would have been the preferred outcome in all of this.
But Sisu has repeatedly stated the Ricoh Arena is not essential to CCFC’s survival and that they plan to build their own stadium. Others hope the club can strike up a successful partnership with Wasps at the Ricoh Arena.
[h=2]Do Wasps need Coventry City FC as tenants to survive?[/h]Wasps have made no secret of the fact they would like CCFC to stay and that the presence of the Sky Blues is beneficial to the business.
However, it is understood the rugby club are confident they can make the business work without Coventry City as tenants and have produced business plans to cope if CCFC decides to leave the venue.
Clearly, most of us would like to see them working together at the Ricoh.
[h=2]How many fans do Wasps need at matches to survive?[/h]There is no hard set figure as the various business models depend on how other areas of the company perform.
However, a very simplistic estimate puts the required attendance - averaged over each game - at somewhere under 10,000 per match.
[h=2]Is the loan a good deal for the taxpayer?[/h]If all goes to plan under the new Wasps loan terms, the council will see the loan repaid - with the full level of interest previously agreed in January 2013 - over half the time previously agreed.
It is worth considering that shortening the length of the loan, increases the level of payment required. Some might say this increases the risk to taxpayers.
But, if ACL ceased to exist, the lease to operate the venue would revert to the council who could then resell the right to operate the Ricoh Arena.
[h=2]Why is the Wasps deal being looked at by an external auditor?[/h]This will be happening as part of the usual annual audit of the council's accounts by independent, external accountants Grant Thornton in their role as the District Auditor.
They will audit all of Coventry City Council’s finances - but they will pay special attention to areas of “high risk” - which will include the council’s share in ACL to Wasps and the revised loan terms attached as part of that deal. The decision to highlight this deal to the auditor was taken months ago when the deal was going through.
This analysis will not involve simply examining the figures and must also examine information behind the decision as well as whether the parties adhered to the legal requirements and relevant procedures.
It is also likely they would want to review official minutes and details of relevant meetings, such as the ACL Shareholders Panel or Full Council, in order to piece together relevant information which led to completion of the deal.
The auditor’s legal right to access this information means the review of the deal could be as comprehensive as any other inquiry could be expected to be - and arguably less restricted.
Conclusions drawn by the auditor will be important with legal challenges on the horizon as the expert and impartial views are likely to be held in high regard by a judge if any financial arguments arise in court.
[h=2]I don’t trust the auditor. What else can be done to look at this?[/h]Sisu has launched an application to have the deal scrutinised during a judicial review in the High Court.
If a High Court judge believes they have a reasonable argument the deal will be picked apart in a meticulous fashion during a public hearing.
[h=2]Were we told the truth about ACL’s finances?[/h]That’s a good question and as it is your money that was loaned to the stadium firm, you’ve every right to ask it.
Certainly, both the council and the Higgs Charity repeatedly insisted that ACL was a profitable company without the football club’s rent, only for the accounts to reveal a £400,000 loss in the year ending May 2014.
This included a period when the football club wasn’t handing over the massive £1.3m-a-year it had been contractually obliged to pay.
The loss forced council leader Ann Lucas to say: “We said that ACL was profitable without the football club, the accounts show different. I fully accept that.”
At least the discrepancy has been acknowledged but a lot of people seem to have been less than satisfied with that answer.
The overall picture is clouded by ACL’s potential performance had it been restructured to try to cope without CCFC.
That is uncertain but what is clear is that the firm is far better with off with two sports teams and there must have been serious doubts as to its future with none.
Only time will tell, but the initial signs are that Cov are doing extremely well regardless and crowd numbers are up at Butts Park Arena. Wasps have also promised to work closely with Cov.
Coventry City seem to be faring less well, and most would argue that the Sky Blues owning the Ricoh Arena on reasonable terms would have been the preferred outcome in all of this.
But Sisu has repeatedly stated the Ricoh Arena is not essential to CCFC’s survival and that they plan to build their own stadium. Others hope the club can strike up a successful partnership with Wasps at the Ricoh Arena.
[h=2]Do Wasps need Coventry City FC as tenants to survive?[/h]Wasps have made no secret of the fact they would like CCFC to stay and that the presence of the Sky Blues is beneficial to the business.
However, it is understood the rugby club are confident they can make the business work without Coventry City as tenants and have produced business plans to cope if CCFC decides to leave the venue.
Clearly, most of us would like to see them working together at the Ricoh.
[h=2]How many fans do Wasps need at matches to survive?[/h]There is no hard set figure as the various business models depend on how other areas of the company perform.
However, a very simplistic estimate puts the required attendance - averaged over each game - at somewhere under 10,000 per match.
[h=2]Is the loan a good deal for the taxpayer?[/h]If all goes to plan under the new Wasps loan terms, the council will see the loan repaid - with the full level of interest previously agreed in January 2013 - over half the time previously agreed.
It is worth considering that shortening the length of the loan, increases the level of payment required. Some might say this increases the risk to taxpayers.
But, if ACL ceased to exist, the lease to operate the venue would revert to the council who could then resell the right to operate the Ricoh Arena.
[h=2]Why is the Wasps deal being looked at by an external auditor?[/h]This will be happening as part of the usual annual audit of the council's accounts by independent, external accountants Grant Thornton in their role as the District Auditor.
They will audit all of Coventry City Council’s finances - but they will pay special attention to areas of “high risk” - which will include the council’s share in ACL to Wasps and the revised loan terms attached as part of that deal. The decision to highlight this deal to the auditor was taken months ago when the deal was going through.
This analysis will not involve simply examining the figures and must also examine information behind the decision as well as whether the parties adhered to the legal requirements and relevant procedures.
It is also likely they would want to review official minutes and details of relevant meetings, such as the ACL Shareholders Panel or Full Council, in order to piece together relevant information which led to completion of the deal.
The auditor’s legal right to access this information means the review of the deal could be as comprehensive as any other inquiry could be expected to be - and arguably less restricted.
Conclusions drawn by the auditor will be important with legal challenges on the horizon as the expert and impartial views are likely to be held in high regard by a judge if any financial arguments arise in court.
[h=2]I don’t trust the auditor. What else can be done to look at this?[/h]Sisu has launched an application to have the deal scrutinised during a judicial review in the High Court.
If a High Court judge believes they have a reasonable argument the deal will be picked apart in a meticulous fashion during a public hearing.
[h=2]Were we told the truth about ACL’s finances?[/h]That’s a good question and as it is your money that was loaned to the stadium firm, you’ve every right to ask it.
Certainly, both the council and the Higgs Charity repeatedly insisted that ACL was a profitable company without the football club’s rent, only for the accounts to reveal a £400,000 loss in the year ending May 2014.
This included a period when the football club wasn’t handing over the massive £1.3m-a-year it had been contractually obliged to pay.
The loss forced council leader Ann Lucas to say: “We said that ACL was profitable without the football club, the accounts show different. I fully accept that.”
At least the discrepancy has been acknowledged but a lot of people seem to have been less than satisfied with that answer.
The overall picture is clouded by ACL’s potential performance had it been restructured to try to cope without CCFC.
That is uncertain but what is clear is that the firm is far better with off with two sports teams and there must have been serious doubts as to its future with none.
lewys33
Well-Known Member
"Of course there’s a reasonable argument that Wasps’ arrival will damage existing teams in the city - particularly Coventry RFC.Only time will tell, but the initial signs are that Cov are doing extremely well regardless and crowd numbers are up at Butts Park Arena. Wasps have also promised to work closely with Cov."
Of course they have promised that. They will work closely in poaching all the good players and handing Coventry a few average ones. Nothing like working closely with your feeder club is there?!
And of course the arrival of Wasps has meant the gates at the butts park arena are up. It has nothing to do with how well they are playing.
Of course they have promised that. They will work closely in poaching all the good players and handing Coventry a few average ones. Nothing like working closely with your feeder club is there?!
And of course the arrival of Wasps has meant the gates at the butts park arena are up. It has nothing to do with how well they are playing.
lewys33
Well-Known Member
Just tainted with the stench of hypocrisy. Definitely better.
torchomatic
Well-Known Member
Malaka
Well-Known Member
I think that SISU are doing a wonderful thing considering that they had no interest in buying the RICOH and didn't want it, they are now spending their hard earned cash helping us taxpayers bring the council to account for the misuse of public money.
Thank you SISU for looking after our interests and protecting Joe Public.
On a serious note, I don't understand what is in it for them or am I being stupid?
Thank you SISU for looking after our interests and protecting Joe Public.
On a serious note, I don't understand what is in it for them or am I being stupid?
It truly isn't hard to work out.
You have a house you rent out, the tenant fails to pay the rent, leaves it empty, sues your ass because you charged them rent for their tenancy.
You decide to sell the house, the errant tenant who has already made your life a misery and cost you huge sums in legal fees, offers you £1. Then along comes another buyer, who offers you £2 and takes your troublesome tenant off your hands.
Who are you going to sell to?
Option A - The nightmare tenant who will probably still sue your ass when they have bought it from you
OR
Option B - The buyer who offers £2 and to rid you of the troublesome tenant
You have a house you rent out, the tenant fails to pay the rent, leaves it empty, sues your ass because you charged them rent for their tenancy.
You decide to sell the house, the errant tenant who has already made your life a misery and cost you huge sums in legal fees, offers you £1. Then along comes another buyer, who offers you £2 and takes your troublesome tenant off your hands.
Who are you going to sell to?
Option A - The nightmare tenant who will probably still sue your ass when they have bought it from you
OR
Option B - The buyer who offers £2 and to rid you of the troublesome tenant
D
Deleted member 5849
Guest
It's all remarkably short termist in view.
Which is kind of why our club ended up where it is too, of course.
Which is kind of why our club ended up where it is too, of course.
Malaka
Well-Known Member
Cheers Nose
I get that but don't get why the hell they are bothered? They are still adamant they wanted their own stadium and the return to the Ricoh was temporary, if the suing was successful, who would get the money and why?
D
Deleted member 5849
Guest
Christ, the value goes down by the day!
fernandopartridge
Well-Known Member
The constant references to what SISU did or didn't do are irrelevant. The council were not in a position that they had to sell to Wasps.
And there is the mystical element, let me translate...
SISU "We don't want the stadium" = ENGLISH "We don't want to pay for the stadium"
SISU "We are building our own stadium" = ENGLISH "This is our big stick, but we don't walk softly, we wave it and threaten with it, give us the stadium or else"
SISU "We need a JR" = ENGLISH "We know we are wrong, but maybe somewhere there is a bit of paper that helps our case for £££LARGE from CCC"
fernandopartridge
Well-Known Member
Why do you decide to sell the house? Particularly when you previously talked of your long term interest in the house? Even in the time since the 'nightmare tenant' stopped paying rent?
D
Deleted member 5849
Guest
A massive great budget hole might suggest otherwise, of course.
We might get to the stage where we move beyond family silver to brass and rusty steel needing to be flogged off, and fast.
Mounting debts and a council having to slash costs. Big empty white elephant up the road with tenant from hell...
italiahorse
Well-Known Member
The enquiry will happen but you will still ignore the obvious ?
The Gentleman
Well-Known Member
What? Sorry mate but they are totally relevant because if Sisu had of done the things they should of we would never be in the position we are in now. The constant line by some on here battering the council over this deal but completely leaving out Sisu is a joke to be honest. I am glad the references are there because as yet has anyone on here or anywhere actually asked for a proper sit down with our owners about why Fisher said they wouldn't do the deal or why they didn't make an offer before or where the new stadium is? People can keep dragging this out and the longer this happens it takes any heat off Sisu/Otium. I'm sorry but I bet Sisu/Otium love some of the posters on here.
The enquiry will be about the legal procedures - not the political process.
It's done by an 'independent' auditor. Paid by the CCC. Likely to be precisely as independent as Mr. Appeltons investigations into ccfc ltd.
fernandopartridge
Well-Known Member
They are not relevant. The council after all is only acting in the best interests of Coventry constituents.
The way it comes across is that they had to sell to Wasps because of SISU, which is absolute nonsense.
italiahorse
Well-Known Member
Can't disagree with this.
You could be excused from reading this board and thinking that Sisu have been hard done by.
italiahorse
Well-Known Member
Answer the question. What should they have done. Wait for Sisu FFS ?
D
Deleted member 5849
Guest
It would actually be nice. There are enough accountants on here he could sit down and have a proper chat with them, go into the nitty gritty.
Hey, maybe a bit of depth to his argument might actually persuade people of his case...
D
Deleted member 5849
Guest
tbf, that could be as prosaic as whoever uploads stuff forgot
Or maybe it's Les Reid, undercover...
italiahorse
Well-Known Member
First time I've seen Joy full length.
I need to reconsider my position !!
I need to reconsider my position !!
Maybe, "Wasps" were able to,or what is more relevant, willing to "show the colour of their money, whereas "Sisu" Hadn't exactly Burnished themselvs as symbols of integrity, when settling their accounts on time, this includes Taxes, as well as the defaltment of over a £million in unpaid Stadium rent, in all honesty "Who"would want to enter into a multi £million deal with these people,Having, already experienced their methods.
Yep It could or would
Conversely he could have other motivations
as a Stadium such as that doesn't really fit the model currently run to
Three times too large currently
twice the size he advocates for a new ground
You could argue he's right on all fronts when looking solely in commercial terms
but this is sport and not competing is unpalatable
Its worth remembering while we all contemplate our navels that this started with the illegal withholding of rent and subsequent non compliance with an order to replenish the Escrow account
Also worthy of mention that none of the subsequent events could have occurred had they taken the offer of £400K rent offered
There was no other method of recourse open to ACL to force compliance or payment as they held a binding license to house CCFC over 43 years unlike a typical landlord scenario where you can simply turf the tenant and possessions out onto the street
On a final note not related to but both the other rugby teams operating in this City could never have benefited as they currently are without the actions of the Football Club In the guise of SISU and especially Mr Fisher
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The Gentleman
Well-Known Member
Fact or your opinion? To me they are relevant and to thousands of other people who wanted CCFC to own the Ricoh.
The way the story comes across is a balance to questions and answers, how people interpret them is another matter but in the interests of balance why do you always jump on these but not the 'other' threads? You see, in my opinion, you saying "it isn't relevant to Sisu" is almost letting them off the hook for not buying it.