Administration (1 Viewer)

[dongonzalos]

Is it plausible thats SISU have accepted that they cant afford to buy the stadium. Once they have realised this they have also realised that they would need to invest 20-30 million into the team to challenge for promotion. They are not prepared to do this.

Is it possible that they are intending to either intending to place the club into administration or sell it Hoffman for next to nothing.

Is it plausible that before doing this they will sell as many playinf staff as possible in the summer. Is this why they were prepared to sell the Juke when we had chance to hold off fr 4 months then sell him

Is this why another financial director has quit. Would it have killed him to wait 2 months till the end of the season before he quit.

Am I just been paranoid? I just cant work out the logic of the Juke sale. He was not banging the door demanding to go. If he had scored another 9 goals he would still eb in demand and would have commanded a higher fee. If he had just scored another 5 goals we would have still got the million for him. He may have kept us up which would have been worth a lot more

Why cant SISU commit to funds for next season when apparently they are in this for the long haul? If there is nothing sinister in it and they are a financial company does it not look unprofessional that tey cant meet financial deadlines for book keeping.

If there is nothing sinister in it why was Fisher telling us he was still looking for loanees. If it is something simple and normal surely they would submit the books ASAP so we can get more loanees and attempt to stay up like Doncaster have.

I really get the feeling I am not been paranoid and this summer really will be a bad un

 

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[dongonzalos]

People in the CET forums saying do not buy season tickets as they will become worthless once we go into administration.............

 

[mark82]

People in the CET forums saying do not buy season tickets as they will become worthless once we go into administration.............

They will only be worthless if we are liquidated.

 

[I'mARealWizard]

SISU are the MAIN/ONLY listed creditor.

What happens when they can't cover payments anymore and the business is liquidated?

Oh yes, the administrator attempts to get as much possible for the main creditors, who are.... SISU!


It's a fucking round-a-bout. So please, no more talk of admin. It's just nonsense on stilts.

 

[coundonskyblue]

Why is it nonsense?

Yes Sisu are the biggest creditor, but the club loses millions a year. At some point they will not be prepared to put anymore in. Unless you think they have unlimited funds to throw away?

 

[SkyBlueScottie]

People in the CET forums saying do not buy season tickets as they will become worthless once we go into administration.............

Ill informed tripe..... Are the Pompey fans who previously had a season ticket now having to buy another season ticket to ensure they get to see the remainder of the season?

They are only worthless if there is no club in existence.... think about it a little.

As for admin, whats the point? SISU are the main creditors, they could just as easily write off the money themselves without having the need to employ administrators, if there are other financial obligations, such as paying off former directors, former banks etc then I could understand it.....

Is it me or when the deal was struck for SISU to take over, was there a time limit of 3 to 4 years in which former directors / banks were able to get a certain amount of money back dependant on whether we had reached the promised land?

 

[jas365]

If SISU stop funding the club, it means we will not be able to find the money to pay our other creditors (i.e. HMRC). It is a 3rd party such as them that would put us into admin, its whether or not SISU would allow this to happen.

Was talking about this in the pub last night, none of us can work out their logic for still staying, there is virtually no chance of anyone coming forward to offer them a large cash settlement for them to go, anyone interested would go down the road of Hoffman's £1 bid.

If they stay then they are just going to carry on losing more money, I can't see any set of circumstances where with the current policy of runing the club it will harvest a profit. They are looking at the accounts like a normal business, the company is making losses so cut the biggest overhead i.e. wages, but football isn't a normal business and the more they cut the worse it will get.

 

[Brighton Sky Blue]

Few football clubs could survive on their own without their benefactors. Leicester for instance are buried in debt from their attempts to buy the title, but the Thais are underwriting it with hefty loans. Were they to cease funding, the club would implode very quickly-as would we if SISU called their loans in, or Abramovich did at Chelsea.

 

[Grendel]

People in the CET forums saying do not buy season tickets as they will become worthless once we go into administration.............

That's not clever.

 

[ICHAN]

Thought the CET forum was shut down?

 

[Nick]

Thought the CET forum was shut down?

It is I think

 

[mememe]

listen guys, sisu are not the owners, they are the investors, the owners are the company in cayman islands. when they say the creditors are sisu they mean the debt which was 35 million sisu took on when buying ccfc has been made as a LOAN to ccfc. do you get that city have loaned the money from sisu, the whole point of putting the club ownership in the cayman islands is for the avoidance of tax on the debt. the club is in dire straits and the sooner the fans get real about the situation the better

there seems to be a blind and somewhat nonchalant thought that any club in trouble will simply go into administration and there will not be liquidations... this is a stupid and dangerous way to think, of course there is a huge risk of liquidation, administration is the easy option!! its when clubs wont go into admin when they are deeply in trouble as we are one should be concerned. they are the clubs avoiding administration because they know they are going to lose everything. believe me we could be the first club of a decent size to go out of existence due to liquidation. remember this ... to buy our club first of all you need to accept the 'loan' of 35 million pound around the clubs neck. then you have to accept the 12 million a year losses ... you then have to accept that to have any chance of making promotion or even avoiding the drop means investing in a team other than what we have now... 10 million?? take all of that into consideration and then work out you will have to pay 60 million simply to provide a home to the club. simply put any buyer would need to risk about 120 million just to take the club on.

i love my club, but i have to say only a complete MUG would take us on for that kind of money. and in a time of austerity mugs are hard to find in this country. the yanks, arabs and chinese arent interested in second tier teams, otherwise they would have splashed out on us by now.

the point im making is there are other issues to consider as to why we would not enter admin, and i believe the main reason is nobody will buy us when the administrators sell. the only silver lining could be a new ccfc can be built and there is a ready made stadium available for the new CCFC. the future in my opinion is liquidation for us, and then the fans will start up new cov city fc. the council will allow football to be played at the ricoh for ticket fees and charge the new club a nominal fee. thats the future guys i am sorry to say. as i see it

 

[dongonzalos]

Apologies but by CET forum I mean the responses posted by people to CET articles.

I am no financial wizz and dont understand it all. Mememe above seems to have a good grasp of it and it doesnt sound good.

My orerridding point whatever the ending is, is i think when people say SISU are letting players go to steady the ship. I understand that, however good business sence would be to do that in a responsible and proportionate manner. It is a fine balanace selling and releasing players but still ensuring that your club is not relegated.

The decision regarding the Juke suggests to me that SISU are either very stupid, naive or they know what they are doing they have a calculated plan and they do not want to reveal what that plan is.
SISU's worldwide reputation is one of complete ruthless within the financial world. Making me think they are not likely to be stupid and naive.

Why release players as soon as you get any sort of offer for them whatever the circumstances?
Am I completely wrong or would relegation be more costly than staying in the championship?

Whilst we dont own our stadium and this action causing attendances to drop, how will it ever balance out?
I think we will continue to make loses and will have to just keep releasing players and still make loses. SISU will not want that, if their intention is to stay with the club for the long haul. That would mean they will just lose a lot more money than the 35 million.

Is it possible they think they cant stop the Hemorrhaging debts and they have an alternative solution of writing it all of before it gets worse and to do this they will sell off whatever they can in the summer. Then place a certain amount of that money into certain places to give their most valued investors some recompence. In order to maintain their repuatation show they have taken strong action in attempt to regain those key investors confidence for future investments, in other business areas where they have been successful.

What I am trying to work out is what is that long term solution and what does it mean for Cov and by mememe's explanation above it sounds like liquidation.

 

[Godiva]

listen guys, sisu are not the owners, they are the investors, the owners are the company in cayman islands. when they say the creditors are sisu they mean the debt which was 35 million sisu took on when buying ccfc has been made as a LOAN to ccfc. do you get that city have loaned the money from sisu, the whole point of putting the club ownership in the cayman islands is for the avoidance of tax on the debt. the club is in dire straits and the sooner the fans get real about the situation the better

there seems to be a blind and somewhat nonchalant thought that any club in trouble will simply go into administration and there will not be liquidations... this is a stupid and dangerous way to think, of course there is a huge risk of liquidation, administration is the easy option!! its when clubs wont go into admin when they are deeply in trouble as we are one should be concerned. they are the clubs avoiding administration because they know they are going to lose everything. believe me we could be the first club of a decent size to go out of existence due to liquidation. remember this ... to buy our club first of all you need to accept the 'loan' of 35 million pound around the clubs neck. then you have to accept the 12 million a year losses ... you then have to accept that to have any chance of making promotion or even avoiding the drop means investing in a team other than what we have now... 10 million?? take all of that into consideration and then work out you will have to pay 60 million simply to provide a home to the club. simply put any buyer would need to risk about 120 million just to take the club on.

i love my club, but i have to say only a complete MUG would take us on for that kind of money. and in a time of austerity mugs are hard to find in this country. the yanks, arabs and chinese arent interested in second tier teams, otherwise they would have splashed out on us by now.

the point im making is there are other issues to consider as to why we would not enter admin, and i believe the main reason is nobody will buy us when the administrators sell. the only silver lining could be a new ccfc can be built and there is a ready made stadium available for the new CCFC. the future in my opinion is liquidation for us, and then the fans will start up new cov city fc. the council will allow football to be played at the ricoh for ticket fees and charge the new club a nominal fee. thats the future guys i am sorry to say. as i see it

I think that for the fans 'to get real about the situation' will require that they at least understand the few actual facts available and base their opinion on those facts rather than myth, hearsay and speculation.

A good place to start will be reading the three FAQ's in the sub forum here: http://www.skybluestalk.co.uk/forums/39-Board-Finance-Discussions.
Next place to go if unsure about finance matters is to read OSB's posts. They can be found here: http://www.skybluestalk.co.uk/search.php?searchid=1048446

 

[oldskyblue58]

lets at least get the facts right..........

SISU are the agents for the investors - they are not the investors at all nor diod they make any loans to CCFC. The investors (SISU's Clients) use a Cayman island based company to channel their investment into various opportunities including CCFC. It is based in the cayman isles for tax reasons because other parts of the investment portfolio show profits that can be taxed clearly our part doesnt. You do not pay any tax on debts, debts written off or losses.

The investors did not take on £35m in debt when the took over CCFC. A very large proportion of the debts were discounted or written off - £35m. Initial loan from SISU investors was £11m. This has subsequently risen to over £30m - the gap roughly equating to financing the Group losses incurred from 2008 until now.

Yes it is put in as a loan - just like nearly every investment by owners in just about any club you claim to mention. Its normal practice - nothing unusual or under hand. If the company ceased then that loan could not be repaid and the investors would lose everything. Oh and there is no interest charged on the loan so saving what £30m x 5% say £1.5m per year

You dont know what SISU might recommend to their investors to settle the loan - it may not be £35m.

Everything that CCFC owns is secured by a legal charge to Sky Blue Sports & Leisure - who have given no legal guarantees to CCFC. SBS&L do not have big third party debts to HMRC etc so wont be under pressure of Admin or Liquidation. CCFC have no assets that a third party can chase, apparently are up to date with HMRC etc and owe SBS&L - so other creditors will be much more likely to agree schemes of payment not push the destruct button

£12m losses !!! I doubt our total wages and overheads even come to that. Do we have no income then?

To avoid the drop costs £10m investing in players ????? Why ? You dont need to spend that much and if you do then the wages to match the fees would increase losses significantly. Yes some investment would be preferable but in our position £1m or 2m would make a significant difference.

So to buy the stadium will cost £60m - all borrowed of course. That would be what £3m in interest (let alone capital) when we pay £1.2 in rent - why do it. The stadium makes £500k per annum when ran well (evidence suggests it wont be so well run under ccfc) so what is the financial benefit. Far better to buy the income streams - wont cost anything like the same.

Just exactly why should a "new" CCFC probably starting in conference because it will have to re register and start again be given use of the Ricoh for all but free. Oh and btw the council doesnt own the Ricoh. The Ricoh has alternative uses to football too.

all your opinion I know - to which you are entitled. Sorry I think it is grossly inaccurrate bordering on scare mongering - but thats just my opinion

 

[dongonzalos]

Bloody hell, I wish I knew the truth. I would imagine it sits somewhere in between these two opinions.

Oldskyblue if you have the time will you go through my last post and give your views on some of the points I have made.

I was under the impression that to buy the stadium would cost 10 million. However it is a lack of trust and confidence in SISU due to their clandestine aprroach and their poor business decisions so far that means they will not be allowed to buy the councils share?

 

[oldskyblue58]

if the plan was liquidation why continue to fund the club knowing you wont get any more money back - that doesnt make any sense. You cut your losses as soon as you can - especially if you are a ruthless financier.

I said a long time back that SISU are dealing with the finance (- ie cutting costs to a minimum ) and letting the playing side find its own level based on sustainable finances. That means relegation is a clear alternative. The only way SISU investors get something to sell is by dealing with the losses we make. A business not making losses and with potential is much more saleable or capable of inward investment from others. SISU are not planning on administration or liquidation - they are doing what they would at any other business they bought. Cut out the losses, find the financial base line, build or market from there.

Everyone knows we have lived way beyond our means for years - the medicine was always going to be painful. We dont like it because as fans the last thing we want to see is our team failing on the pitch, but in truth the last thing we want is our club to go out of business. That suits no one including SISU investors

 

[sky_blue_up_north]

I knew OSB would come up with a sensible response. I will be getting my season ticket with no worries of Admin, people seem to be obsessed with it on here

 

[dongonzalos]

So with them not submitting the books as they are not garanteeing finance for next year could that not suggest that they are considering not continuing to finance the club.

Would it not be more financially astute to sell players but ensure cheaper suitable replacements are in place that would ensure we stay in the championship. By this I mean sell Juke but sign a player for half a miliion so you dont get the full million for Juke but you stay up.
If you cant find that player then hold onto Juke for 4 months then still sell him once the replacement has been secured. Why would they have felt it neccessary to sell Juke at that moment, if the club was not going to go under unless he is sold.
It smacks a bit of short term gain for long term pain.

 

[dongonzalos]

'Relegation to prove costly if City are to be relegated

Whoever owns Coventry City next season could find themselves having to fund even bigger losses if the club were to relegated at the end of this season.

The Sky Blues currently receive £2.2m in solidarity payments from the Premier League as a Championship club plus the money from the television deals and other deals which brings the figure to the region of £4m.

However, dropping down a division will see these payments drop to around £800,000 for clubs in League One.

City, who will also have to deal with a wage cap which may see top earners.as players wages increase every year, being sold or allowed to leave.

If that wasn't bad enough, the club might have to deal with a drop in season ticket income if supporters decide that they don't want to watch what is basically third division football on a regular basis as well as a decrease in sponsorship due to a lack of television coverage/ media interest.

All these losses will be have to covered by the owners who will be hoping that a return to Championship football will be sooner rather than later.'





Wake up and smell the coffee. Laughable to think only Cranie, Clingan and maybe Keogh will go in the Summer.




For example this is otis comment on another thread. If he is correct and we stand to lose 4 million by relegation. Was it financially astute to sell The Juke for 1 million rather than wait 4 months and then sell him either way. It's decisions like that, that dont sit easy with me on the idea that SISU currently just are trying to make the club financially stable

 

[mark82]

So with them not submitting the books as they are not garanteeing finance for next year could that not suggest that they are considering not continuing to finance the club.

Would it not be more financially astute to sell players but ensure cheaper suitable replacements are in place that would ensure we stay in the championship. By this I mean sell Juke but sign a player for half a miliion so you dont get the full million for Juke but you stay up.
If you cant find that player then hold onto Juke for 4 months then still sell him once the replacement has been secured. Why would they have felt it neccessary to sell Juke at that moment, if the club was not going to go under unless he is sold.
It smacks a bit of short term gain for long term pain.

I may be wrong but I believe the delay in agreeing funding for another year may be down to ongoing takeover talks (I know you don't all believe this). Maybe there is another reason (maybe OSB can advise on this too )

 

[oldskyblue58]

Bloody hell, I wish I knew the truth. I would imagine it sits somewhere in between these two opinions.

Oldskyblue if you have the time will you go through my last post and give your views on some of the points I have made.

I was under the impression that to buy the stadium would cost 10 million. However it is a lack of trust and confidence in SISU due to their clandestine aprroach and their poor business decisions so far that means they will not be allowed to buy the councils share?

It isnt the councils share of ACL that has an option for sale it is the Charity. Thats half of ACL who run the stadium not half the stadium. Council can veto the sale as can the Charity.

Any player sales are locked within CCFC - and any sales proceeds used to fund the operations of CCFC. Wouldnt make much sense to pay off SISU investors if they then have to loan it back to CCFC

SISU are actually taking a longer term view - the business must be heading towards financial stability. If living within our means equals more use of loan players, academy, journeymen ets then so be it as far as they are concerned. Their focus is on losing the least amount of money not taking a gamble on success

I think you are dead right - SISU are not stupid or naiive. They just dont communicate what they are doing

Players get sold because the finances are that desperate. SISU investors are not the first port of call for finance they are the last. Every other option is and will be utilised first before they top up any shortfall. CCFC needs the cash from quick deals and quick deals usually mean discounts simple as that

The hope is to maximise the cost cutting, invest in the academy side, grow our own talent, stabilise for now with the hope of better on the field as the young talent kicks in. There will be players brought in, loans probably but we are cutting out all the top earners that have achieved us little, their view isnt about the next couple of months, i doubt it is just about next season - as long as the losses are reducing (and we are told they are) then their loan remains constant and their risk also reduces. Once we get to sustainability then that is when things will push forward in team investment, roughly when there will be a load of players without contracts at other clubs and willing to take pay cuts.

They cannot treat one investor differently to another within the one investment of CCFC.

Player sales will have been and always will be a fact of life - I dont think we should read anything other than that into those sales. What is important long term is that CCFC survives - what ever it takes. Player sales are going to cause all sorts of friction with the fans but would we rather have Juke or a club ?

We dont have major assets to trade or mortgage - but we have overheads and wages to pay. Clearly turnover doesnt cover costs so what is the alternative to cutting costs and player sales. We are fighting for financial survival with no outside investment to come .

 

[dongonzalos]

So effectively you are saying that, because they will only turn to SISU as a last resort. They would rather sell the Juke to cover the immeadiate costs of wages and overheads.
Rather than go to SISU and borrow the money and wait for months sell him then pay them back immeadiately.

It makes sense what you are saying. Sense as in why they would make such an illogical decision. Effectively SISU are playing hardball and saying you have to become financially stable yourself without coming cap in hand to us.

However regarding the Juke it seems they are cutting off their noses to spite their face.

In my limited knowledge to me it would have made more sense for SISU to lend that million under the condition the Juke is sold either way in the summer.

Surely 4 onths is not too long to wait and could have saved us 4 million.

However Oldskyblue I appreciate you taking the time to explain it.

Wish SISU would take ten minutes to do the same

 

[oldskyblue58]

I may be wrong but I believe the delay in agreeing funding for another year may be down to ongoing takeover talks (I know you don't all believe this). Maybe there is another reason (maybe OSB can advise on this too )

It could be a reason certainly - but my honest opinion is that it isnt. I think it is more to do with what division are we going to be in. Also I think some of the player costs or player retentions will be affected by relegation and will impact on the plans. But thats just an opinion I dont know for sure

dongonzalos - SISU never guaranteed any funds, not even in the 2010 accounts........ what they said was that it was their intention to source funding and to trade players. We shouldnt get hung up on thinking that SISU investors are guaranteeing any funds going forward they wont be. There has to be a detailed plan for the business to pay its own way, that is currently not yet agreed or audited. If you accept that they have an intention to do what ever is needed to find other finance and to player deal then what has gone on this season really isnt a surprise

 

[Brighton Sky Blue]

What I take issue with OSB, is that whilst we have attempted to run a more sustainable business, and sold players accordingly, few other clubs in the league have done this and seem to benefit from running themselves irresponsibly. When you see the likes of Pompey getting hand-outs from the FL, Cardiff and Leicester throwing around someone else's cash for fun, and Donny signing the world on loan, you wonder why we bother to run ourselves to a budget. Until next season's rules kick in, there has been absolutely no incentive for a club to stick within their means.

 

[oldskyblue58]

never been a level playing field BSB - and it riles me too !

Got to hope that we are able to take advantage in seasons to come.

Pompey (or was it Bristol) i am sure i heard need to reduce wages from £15m to £6m that is going to take some doing. It is going to affect a lot of other teams similarly.

If we get relegated then the rules are already in for League 1 and the calculation will be based on the 2011/12 figures which will give us an advantage over most clubs in that division. We will also already have cut our costs and lost the high earners. Maybe we get a positive for a change ?

 

[Brighton Sky Blue]

There's talk north of the border that Rangers will cheat the taxman by liquidating then reforming, and transferring their shares across so that the new Rangers emerges debt free and with its staff and playing squad intact. If they succeed in this, what a precedent it would set for other clubs-max out your credit card, fold, reform, and start again-sincerely hope that doesn't come to fruition!
In League One, aside from the top 6 there aren't many teams I think we would struggle against-with the current squad. Lots of clubs in there running on similar budgets to ourselves so though we wouldn't be expected to walk the league, we would be expected to have a strong campaign. That Portsmouth are rewarded with £48 million over 4 years for being relegated is nothing short of farce.

 

[oldskyblue58]

If clubs are going to do that then I think the government will have to legislate. The clubs wont like it nor the leagues but I think there is a ground swell of opinion now that says enough is enough and we are getting ripped off.

Can but hope something is done about it anyway - its a disgrace!

 

[Brighton Sky Blue]

Government interference would get England an international ban by FIFA :thinking about:

 

[oldskyblue58]

Not if it is a change to the Insolvency Act so that it over rides rules in governing bodies that are to the detriment to the crown or other creditors. Not interfering in the FA Premier or Football League at all then. And cant claim they are being treated unfairly

 

[SkyBlueScottie]

Its an absolute disgrace that football clubs are even contemplating cheating the tax payer......

 

[EleanorRigby]

All thats been explained on this thread, complications if's, but's, maybe's but it all illustrates why if there is a takeover in the wind it is taking forever

 

[wingy]

In the words of Tim fisher "it can't be ruled out ,though i hope not on my watch,"so is it that ludicrous?

 

[Jack Griffin]

In that CWR inrterview Tim Fisher also made noises about the academy & bringing in young talent.

I got the idea the concept was to make the club rather like Crewe used to operate under Dario Gradi, but on a slightly higher level, they were a club, usually in the 3rd tier who had a well respected academy that developed some fine players who they sold on from time to time. Dean Ashton for instance was with them in his early 20's before going to Norwich for £3M & thence to West Ham for £7M (with a 20% cut for Crewe).

 

[thorn in my side]

In that CWR inrterview Tim Fisher also made noises about the academy & bringing in young talent.

I got the idea the concept was to make the club rather like Crewe used to operate under Dario Gradi, but on a slightly higher level, they were a club, usually in the 3rd tier who had a well respected academy that developed some fine players who they sold on from time to time. Dean Ashton for instance was with them in his early 20's before going to Norwich for £3M & thence to West Ham for £7M (with a 20% cut for Crewe).

Perhaps a better example would be Charlton / Southampton? - both clubs took a step backwards, got the finances in order, invested in the academy and 3 years later have come back stronger than ever and financially solid. IMO this is the right way forward.

As for the point being made about administration if SISU pull out - disaster. I would thus advocate a charm offensive to persuade SISU to commit funds - certainly to keep the club afloat, if not to go the whole hog and acquire the stadium - in the absence of a credible alternate bid (of which there is not one at present save for a whisper and a rumor). I prefer to deal with the reality (SISU) rather than the speculative (Hoffman).

Tin hat time as the usual suspects appear in response....:facepalm: