Are SISU/Board preparing us for Division 1?

Discussion in 'Coventry City General Chat' started by oldskyblue58, Nov 8, 2011.

  1. oldskyblue58

    oldskyblue58 CCFC Finance Director

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    The feel I am getting is that the Board are allowing the club to find its own level financially and playing wise. That is why they are keeping a distance, that is why they are so stubborn in terms of player matters. They know we are heading for rock bottom, have accepted it and are planning for next season in division 1

    Clearly they are not prepared to put more money in - they must realise the implications of this in terms of the playing staff available and even the manager available. They have not been moved to help or greatly improve the squad in fact I think most fans expect further player departures come January. That has one likely outcome - the team unable to compete and finding its level at the bottom of the table. We as fans have expectations from the "mighty" Sky Blues often unrealistic but I dont think the current owners and Board do

    If they had expectations then there would be pressure on AT from above - there doesnt appear to be say the pressure Coleman had. If they had expectations there would be greater urgency in new player matters. If they had expectations there would be greater urgency in finding new investors. I think they want to let us go to rock bottom, to find a level from which to build - from their point of view lean mean and sound footing.

    They are taking measures to fix costs - the new contracts offered to some players point to that. The contracts dont increase the worth of the club balance sheet but future finance will depend on costs being controlled - our biggest cost is the wages. Give the players 3+ year contracts and you know the costs for 3 years. Strange all contracts now have the term undisclosed too. Yes it ties the players in so we can cash in and sell them but who would buy some of the senior players who have new contracts? It works for the young lads but they get 2 years to 2013 or maybe 3 but i cannot get my head round 4 years for bell !!

    I think they have accepted that League 1 is where we will be next season and to build from there. This is going to be a long hard and sorry season for the fans. Our squad is small and we will always carry some injuries why lock us into perpetual crocks if it wasnt planning for next year?.

    There has to be a plan to all this and I see no ambition in the current owners and board surely that can mean only one plan............ to find rock bottom and build from there.

    must remember to keep taking my depression medicine :thinking about: :facepalm: :(
     
    Last edited: Nov 8, 2011
  2. shmmeee

    shmmeee Well-Known Member

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    I certainly think a budget has been set and the priority is to stick to it rather than any particular league position. My worry is are they savvy enough to have predicted the massive income drop that comes with relegation or do we have another cost cutting exercise next season ?
     
  3. coundonskyblue

    coundonskyblue New Member

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    Surely though we must already be losing a lot less than the £5 mil a year that is often quoted? It seems to have been that for years.
     
  4. Badgerdan

    Badgerdan New Member

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    The 'owners' are only hoping for money in the long run, after 10 years. They're hoping the youth will come through eventually and build us slowly up again from league 1 or 2 instead of using lots of cash just to struggle here in the champ.
    Plus they want the ricoh for its entertainment/casino side
     
  5. shmmeee

    shmmeee Well-Known Member

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    Depends doesn't it. Going out early in the cups, reduced support (less tickets and merchandise) will have an impact as well. Not to mention paying off about 52 financial and marketing directors.

    You'd hope it's less, but even if we get to break even this season, we'll have to do the same again when gates and TV money drops next season. It sounds good in theory to "find your level" but that level is not a constant, it changes depending on where you are in the league. We have certain costs (the Ricoh) which will always been above those below us and others (salaries) that will be relatively high compared to those in L1.

    There's no easy answer of course, because investing in the team is just as much of a gamble, you have to hit the right level of investment to raise gates but not so much that you spend your way into admin. That's why most clubs that do well either come from the lower leagues quickly (so their fixed costs don't have time to rise) or get a sugar daddy (so they don't care about losing money)
     
  6. SkyBlue_Bear83

    SkyBlue_Bear83 Well-Known Member

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    It seems to me the board/SISU plan to cut costs until we are breaking even regardless of where that puts us in the English league system.
     
  7. Otis

    Otis Well-Known Member

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    But how are we going to break even? The lower down the leagues we go the smaller the crowds will be unless we are successful. The only way we will make a concerted effort to be a winning team in the lower leagues is to splash a bit of money in the transfer market. It's a vicious circle.

    Any talented kids will be snaffled up by bigger clubs.
     
  8. shmmeee

    shmmeee Well-Known Member

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    That's the problem. We're set up to be bigger not smaller. Well only break even by earning more, not spending less.
     
  9. kg82

    kg82 Well-Known Member

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    I thought they were only financing us till the end of the season anyway?
     
  10. cloughie

    cloughie Well-Known Member

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    Yes without doubt! no interest in the football side of things and have put a huge drain on resources in The orange dildo take home pay . same as he did at southampton via 1 method or another.


    Please scan your prescription for depression and send it to me I think I need a large dose
     
    Last edited: Nov 11, 2011
  11. Jack Griffin

    Jack Griffin Active Member

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    OSB, what are the dates by which accounts have to be published? Mind you there seem to be 4 companies in the structure below SISU, presumably with different dates...
    I'm just interested to have an idea of when the size of the 'new' directors renumeration packages & interest charges paid to SISU will be found out. I think they may be quite LARGE!

    Edit: I found out details below, I sort of have the feeling that OTIUM is designed to hide some details for another year....anyway end of Feburary is the next date of interest, not long now.

    OTIUM ENTERTAINMENT GROUP LIMITED Date of Incorporation: 21/04/2011 - Next Accounts Due: 21/01/2013 - Company No. 07612487
    COVENTRY CITY FOOTBALL CLUB LIMITED Date of Incorporation: 16/05/1995 - Next Accounts Due: 29/02/2012 - Company No. 03056875
    SKY BLUE SPORTS & LEISURE LIMITED Date of Incorporation: 31/10/2007 - Next Accounts Due: 29/02/2012 - Company No. 06414248
    COVENTRY CITY FOOTBALL CLUB (HOLDINGS) LIMITED Date of Incorporation: 24/07/1907 - Next Accounts Due: 29/02/2012 - Company No. 00094305
     
    Last edited: Nov 14, 2011
  12. oldskyblue58

    oldskyblue58 CCFC Finance Director

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    Jack - spot on with the info you have found. Will be interesting to see if they are filed on time this year

    Otium is only different because of the year of incorporation rules. I think the year end has been changed to be same as other companies so will be same filing dates after the first year
     
  13. WillieStanley

    WillieStanley Active Member

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    Does anybody know if there are any parachute payments for dropping out of the Championship? If they are preparing us for the drop, then income from that is surely appealling to SISU?

    You have an excellent way of putting your view across, OSB. I've pretty much bought into that theory.

    Another question though, Does anybody know how long the City Link deal was for? I can't see them renewing without Hoff here and if we're in league 1, we're not going to get a tasty little deal like we got out of them... actually, I'm not sure we'd get that kind of deal from anyone else if we remained in the Championship!!
     
  14. Godiva

    Godiva Well-Known Member

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    I don't think they have accepted relegation (yet), but things being what they are, propper management will dictate planning for the worst.

    As we dicussed in the three FAQ's they won't put in more money. The club will have to learn to live within its means. We both agree this is for the best long term. I think it is impossible to get more money from the existing funds as the investment terms are unlikely to hold that option.

    This also means players will leave next window. As Clingan and Cranie haven't signed new deals I would expect those two out for some cash or maybe player exchange.


    Sisu's expectation is probably that we stay up this season. If I was in their shoes I would look closely at each match we have played and know we haven't been very lucky so far. We could easily have 8-10 points more than we actually have and then there would be no panic. We don't play any worse than the previous seasons even though we now rely on a very young team so we should be able to at least duplicate a final league position just above the drop line.

    You ask for urgency, but I would argue that too many are in a state of panic. I still have some patience left and think we should give AT and the players till January before drastic changes are made.

    No comments to this part.
    Except - undisclosed contracts ... why would they not be undisclosed? I mean, what is the benefit of letting the whole world know the contents?
    I fail to see it would benefit us - the fans - only our curiosity.

    Again, I don't think they have given up yet. Yes, the squad is small and youngsters are being put in key positions. I - as many others- have over the years asked for the kids to be given a chance. Well, this year they are givven more than a fair chance. If they make good impressions they will get to play even more and from the clubs point of view they will increase in asset value.

    Plan and ambition. Hmm.
    As I said the plan is not to get relegated but to stay up. But first priority is to keep the business afloat. The fiddling with new companies is either to do a relatively peacefull administration where the funds will become the losers or to have a place for new investors to buy into the stadium.

    There are still plenty of time to find some form and get the needed points. The positive outcome should we stay up is that the young prospects will have a full year of Championship experience and can either be sold next year to keep the club alive or have us fighting a bit higher up the table.
     
  15. BurbageSkyBlues

    BurbageSkyBlues New Member

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    there is one thing that we have not debated on SBT, which may influence the financial tactics of SISU - when do the naming rights of the stadium come up for renewal? Was it a 10 year agreement with Ricoh? Who would benefit from the money, on any new deal, I wonder.......

    If the club is breaking even, then Sisu can hang around until they get a share of the stadium, and any spin off from the naming rights....?
     
  16. Jack Griffin

    Jack Griffin Active Member

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    The deal was £10 million for 10 years, signed in 2005, but it is with the Arena Company Limited, not the football club, SISU don't own a share of that.

    I don't think SISU have a plan to stay that much longer, they have been here nearly 4 years now & they have now started taking out all value they possibly can. I think they will sell up early to middle of next season.
     
    Last edited: Nov 16, 2011
  17. Godiva

    Godiva Well-Known Member

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    That is news to me! What values have they taken out?
     
  18. valiant15

    valiant15 New Member

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    Godiva,why do you always stick up for those disgusting parsites?
     
  19. shmmeee

    shmmeee Well-Known Member

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    So... you don't have an answer to his fairly straightforward question?
     
  20. Jack Griffin

    Jack Griffin Active Member

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    They sold Ransons collateral & took out a loan on future sales, i.e. a stop gap policy to see them to the end of the season. There is nothing more for next season!

    They sold Ben Turner & I think very nearly sold Jukewitz, except the 'Beast' deal fell through. I would bet that one or more players will have to be sold in January to finance the club till the end of the season. Anyone who hasn't signed a new contract will be on the list for sure. They have got to trade to survive, but at present far more will go than will come in.

    I'm waiting to see how high the directors fees were and what the loan charges have been, that is where I think the main removal of capital has been concentrated. We won't know till the accounts are published.

    The assets of the club are declining.. I don't think all of that money is going to run the playing side. The next threat will be the Academy & Ryton, that is really all that's left.

    I reckon they will go into administration next year, leaving a lot of debts unpaid.

    Do you really think they are staying for the medium to long term, if so what makes you say that? They simply want to get the money they put in back plus a healthy return, then they are out of here.
     
  21. Godiva

    Godiva Well-Known Member

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    Jack, I am a little confused here. You say they have taken values out (as in out of the club) and goes on to explain why you think it is so.

    Yes, they sold Prozone and bought out Ranson. I don't think they could have done otherwise. As much as I think Ranson failed big time and is the course to the current mess the only way to get him out of the shop was to follow the contract and the investors agreement. The revenue from the sale of Prozone didn't go into sisu's pockets.
    Ransons shares were sold to Brody and when all the dust had settled some money were left to finance the club a few months forward.

    True they sold Turner, but then they bought Cody didn't they?
    They didn't sell Juke and no matter how much anyone 'think' they almost sold him, the fact is he is still here. Almost selling someone isn't 'taking values out'.

    More players will go in January you say and yes I agree. Probably Cranie and Clingan as they haven't signed new contracts. We don't know if they will be replaced, but if the club needs money to survive short term I think sisu will secure that sum before signing new players.
    But that is still not 'taking values out' - it is 'trading to survive'.


    In 'FAQ 2 - Money Talks' we discussed directors fees and stated that no directors except Ranson have been paid. Ranson got his pay in his capacity as CEO which required him to work full time at the club.
    We don't know if any director currently is being paid, and it is pure speculation with NO history to back it to suggest otherwise. I would think KD is being paid just like Ranson for his CEO role, but I don't know.

    Can I quote you on your own post in the FAQ? Well I do anyway as I think it was a very good post:

    I especially like the last paragraph. It shows maturity and acceptance of the situation we're in.
    What happened?

    Declining assests is the natural consequence of living beyond means. Getting to break even is the ONLY way to stop the rot.


    This may be a possible outcome but the most debts left unpaid will be to the sisu administrated funds. I think they will do what ever they can to pay everyone else in a quest to keep the club alive. Finding a solution where the funds take the hit will be the optimal outcome.

    I think they will stay for as long as it takes to get their money back plus a healthy return. The only way is to get the club to become profitable and acquire the stadium, otherwise no new investors will buy them out on acceptable terms. How sisu handles the debts owed to the funds will be interesting as this will tell how long they are planning to stay.
     
    Last edited: Nov 17, 2011
  22. Bennets Afro

    Bennets Afro Active Member

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    We will never make a profit without full ownership of the arena I'm afraid or unless we fluke a successful season and get the crowds back. Neither will happen while SISU are in charge.
    Relegation will only mean less revenue coming in from tv and sponsors and tie that together with the dwindling crowds only means more cutbacks on the pitch.
    We could easily fall out of the league completely in 5 years while SISU maintain their current strategy or go bust!!!
    Where will that leave SISU then?. They should take the hit now and do the right thing and get out
     
  23. Godiva

    Godiva Well-Known Member

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    But it won't be sisu who goes bust - they haven't invested any money themself! Should the club go bust, sisu will merely lose an unknown yearly 'management fee'. If they succeed to turn the business around and sell on with a profit, then they will probably get the most (maybe a percentage of takeover sum), so I think they will stay.
     
  24. ashbyjan

    ashbyjan Well-Known Member

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    That is the most frightening statement of all - if we get to break even SISU don't have to go cap in hand to their investors or scamble around selling off the family silver to fund the club for another quarter they reach a status quo where they are getting paid for managing the funds, the funds will I assume start getting some revenue from the club, albeit slight to start with to start paying back the loan so they are happy, SISU are happy - the only ones who won't be happy are the fans who will be watching 1st Division football. The only question then will be how long this situation would remain until the fan base dwindled even further, meaning more cuts leading more than likely to another relegation etc. Whatever SISU's plans are they are certainly not for the benefit of the fans or the club - they are in an exposure limiting exercise and this does not bode well for the future of the club. To be successful in any form of business investment is needed for a business to move forward, cutting costs with no regard for the quality of the product is a recipe for long term disaster.
     
  25. Godiva

    Godiva Well-Known Member

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    You can't have success if you go bankrupt - it really is that simple. So the club - no matter who runs/owns it - MUST become profitable.

    The fast road to profitabillity would be if the club can buy the stadium, but no investors are interested as long as the situation is what it is. So the club will need to gain more income. This could be through higher attendances (long way to go), player trading (expect activity in January), cost cutting (if more costs can be cut) ... and a host of new initiatives designed to generate income.

    Maybe we will be watching 1st division football, but didn't many ask for that a few months ago: Go into administration, get relegated and start a fresh, win promotion, do 'a Leicester'?
    Anyway, I don't think sisu is going for relegation as plan A. But I hope they have contingency plans should that happen.
     
  26. chiefdave

    chiefdave Well-Known Member

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    isn't it a never ending cycle tho? we've cut costs this year presumably based on income last year. now that income has dropped due to the team not performing and attendance dropping so we sell more players in January to balance the books again and make ourselves relegation certs. won't next season then be more of the same. We drop to Div 1, lower income and attendances lead to more cost cutting leaving us with an uncompetitive team again. At what point does it level out?

    Not saying we should be spending millions we haven't got but most business plans to turn around a failing (loss making) business involve a cash injection over and above running costs to get the business in a position where it can at least break even.
     
  27. Jack Griffin

    Jack Griffin Active Member

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    The salaries in League One are much lower than even the championship.

    Season--P--C--L1--L2
    1995/96 110 50 22 13
    1996/97 135 59 26 14
    1997/98 190 80 33 17
    1999/99 284 82 42 20
    1999/00 319 114 42 23
    2000/01 396 138 42 24
    2001/02 475 150 51 27
    2002/03 548 149 48 26
    2003/04 583 138 40 25
    Old data, but the figures represent salarys paid by the entire league in millions, the percentage differences should be fairly good, i.e. L1 wages are 1/3 of those in the Championship.

    Source http://www.footballeconomy.com/cont...s-earnings-english-football-leagues-1996-2004
     
    Last edited: Nov 17, 2011
  28. wingy

    wingy Well-Known Member

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    If per say you were employed in the construction industry as a bricklayer by a company of repute ,who gave a tacit signal that the customer was no longer as integral to success ,and costs were the only critical factor and to improve these two or three vital coggs in the operation were being withdrawn ie; the diggers and the labourers,meaning you now have to manually dig your own foundations ,mix your own muck,and be your own hod carrier,yet still achieve your origonal targets,what would be the effect.you'd either strive to maintain your initail quality under immense stress and never meet your targets or respond to that tacit signal ,dig your foundations half as deep ,lay your bricks out of true ,your corners out of plumb,making harder work for the plasterer and carpenter and leaving you with many dissatisfied customers who will either change brand ,or stay put,no matter we're staying withinthe cost bounderies set.Sorry for being long winded but is this not the message the manager and players @CCFC have recieved from SISU and are performing accordingly.
     
  29. Stevec189

    Stevec189 Member

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    Are there not rules in League 1 about the amount you can spend of turnover in wages? If we assume the playing squad costs remain the same (maybe the people will change) will we be deemed fit enough financially for League 1?
     
  30. shmmeee

    shmmeee Well-Known Member

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    Maybe when they say "We're prepared for the financial fair play rules" that's what they mean...
     
  31. cloughie

    cloughie Well-Known Member

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    Godiva your post are factually correct but as you and i know football is not the same as normal business. There is always the big carrot at the end of the stick for football clubs, if we can just get up there this time we will be in profit. The trouble is that sisu started with that pretext but soon jumped ship and the normal business plan of cut cost started and expect to remain at a status quo is floored ( yes I expect status quo jokes now)
     
    Last edited: Dec 6, 2011
  32. westerby

    westerby New Member

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    Agreed, there must be some form of financial strategy in place that includes the relegation of CCFC to Division 1. What troubles me even more are the knee jerk policies that SISU and the Board pursue, e.g. the appointing Dulieu as 'Head of Football Operations' (WTF!!!). Forgive me for stating the obvious but this club needs strong, single-minded leadership. CCFC is going nowhere (save for further relegation nightmares) 'til then and I don't think Hoffman can step up to the mark in that respect.
     
  33. skyblueindorset

    skyblueindorset Well-Known Member

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    Westerby, I don't think that Hoffman wants much (if anything) to do with the running of the club. He is, I believe, just putting together a consortium to take over. In that respect, it doesn't matter whether or not he can provide the 'strong, single-minded leadership' that the club needs. That will be up to the new board installed by the consortium. It could be that Hoff would not be on a new board.
     

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