Debt Increases with a new "mortgage" (2 Viewers)

skyblu3sk · Jul 11, 2011

The Sky Blues have effectively mortgaged next year's season tickets and taken out a loan for £1million, secured against annual payments from the League, to enable them to pay the wage bill in June and see them through the next couple of months that will have incurred costs of around £200,000 in financial fees. It was carried out just in time to avoid a new transfer embargo.

Ccfc1979 · Jul 11, 2011

If they are so desperate for cash and are losing so much, surely they'd need to raise more than £1m. Praying they are just getting by until takeover really does happen. If not, things are going to get horrendously worse and quickly!

bradwellskyblues · Jul 11, 2011

it is also becoming clear that the telegraph is working with gary hoffman as someone from within the club must be feeding these stories to help his bid .borrowing money against ticket sales is common practice by clubs and not out of the ordinary

Lord_Nampil · Jul 11, 2011

Isn't a mortgage normally for property or am I missing something ?? Isn't a loan against season tickets ! And brad course they are doesn't work for the
Company that owns them?

procdoc · Jul 11, 2011

apparently SISU are resisting any bids to buy the club, what the fuck?! If they can't invest to even keep us afloat then what is in it for them other than more loans, mortgages or player sales? If it carries on this way we'll have to sell any assets we have got for cheap fees and by the first game we'll have our youth team running out against leicester. I guess all the talk of a siege mentality coming from the players and staff is indication of harder times to come

fanta80 · Jul 11, 2011

procdoc said:
apparently SISU are resisting any bids to buy the club, what the fuck?! If they can't invest to even keep us afloat then what is in it for them other than more loans, mortgages or player sales? If it carries on this way we'll have to sell any assets we have got for cheap fees and by the first game we'll have our youth team running out against leicester. I guess all the talk of a siege mentality coming from the players and staff is indication of harder times to come

Depends if you beleive the story in full. If they are siding with Hoffman they will write whatever they can to force SISU to sell. How do we know for sure they have rejected 2 bids? People just beleive whats written down when they were no quotes from either party.

rob9872 · Jul 11, 2011

Mmmm I'm sure SISU are scared what the local rag print ....

They will sell if their advisors believe it is the right decision for the investors and for no other reason. Anyone who thinks different is a little naive. That doesn't mean they won't sell, but means they will do what is right for them.

As for the Hoff, if his bid is to have any credence, he surely must be prepared to offer a fee. What incentive is there for SISU to simply "walk away" as I've read on here? I'm sure nobody wants admin, but it will make no difference to SISU to enter admin as opposed to walking away for nothing. In fact they would get a share of any worth that remains as the sole creditor so admin is preferred over walking away for them. It might only be a fraction of their investment, but if they decide enough is enough, then whatever that figure it turns out to be, will certainly be more favourable than zero.

cloughie · Jul 11, 2011

Rob very true but who in their right mind would lend money to a business like CCFC with the possibility of admin and even worse possibility of liquidation. Could it be the only person might be someone who has an interest in the business and who will be around to control the finances to enable a guaranteed return of the loan,ie an investor who wants to keep the club going short term whilst takeover talks continue?

Senior Vick from Alicante · Jul 11, 2011

I agree with ccfc1979! It must be some sort of short term funding or bridging loan to enable the club to function and be sold as a going concern. SISU would be in a better position selling the club as opposed to administration as this would severly affect their business credentials as a reliable venture fund for investors. Who ever is looking wether it be Hoffman or the others that have been mentioned on the forum, they would already know about this loan as they should have done due dilligence on the accounts.

Whatever happens it needs to be quick as we are currently the basket case of the league never mind the championship. It is obvious that SISU have no forward strategy for the club and Hoffman is the only person with the money on the table and one would think if they accept the offer then it would take a while for the moneys to be put in place. Lets hope they get their heads out of the sand as the current board members are just puppets rather than active directors, if they were we would not be in the shit now. I fear were in for a rough couple of weeks unless SISU admit defeat and do the honourable thing and sell up.

PUSB

Nonleagueherewecome · Jul 11, 2011

fanta80 said:
Depends if you beleive the story in full. If they are siding with Hoffman they will write whatever they can to force SISU to sell. How do we know for sure they have rejected 2 bids? People just beleive whats written down when they were no quotes from either party.

Are you calling Joe Elliott, and Gary Hoffman, liars? And you think Brody et al are telling the truth?! Think I'll side with the Coventry fans who've been on the board with this one...

Nick · Jul 11, 2011

Nonleagueherewecome said:
Are you calling Joe Elliott, and Gary Hoffman, liars? And you think Brody et al are telling the truth?! Think I'll side with the Coventry fans who've been on the board with this one...

SISU have a history of lying, so many people have said different to them in the past like with the Council, GH, JE, Gunnarsson, Jay Tabb, King....

grego_gee · Jul 11, 2011

bradwellskyblues said:
it is also becoming clear that the telegraph is working with gary hoffman as someone from within the club must be feeding these stories to help his bid .borrowing money against ticket sales is common practice by clubs and not out of the ordinary

Ok, how many other championship clubs have done it this season?

grego_gee · Jul 11, 2011

Who would give a mortgage to CFCC? Nat west? I don't think so! Its probably SISU!...... ???? just their way of writing it into the accounts!

rob9872 · Jul 11, 2011

grego_gee said:
Who would give a mortgage to CFCC? Nat west? I don't think so! Its probably SISU!...... ???? just their way of writing it into the accounts!

Well I doubt they would have approached the Hoff and Northern Rock

Nonleagueherewecome · Jul 11, 2011

If it was such common practise, why have the clubs (including ours..) voted to outlaw it, with the punishment being a transfer embargo? Doesn't sound standard to me. At any rate we'll be the last club to do it now.

oldskyblue58 · Jul 11, 2011

ok question ........... who is paying for their season ticket by direct debit with Zebra finance ?

so you are not paying the club now are you........ the debt is sold to the finance company ..... who in turn provide money up front secured against the collection they make of direct debits over the next 8 months. This happened last year and the year before and is not unusual for clubs. (also ask If you recieve other season tickets in full now (ie cash or credit card) why would you or how could you mortgage that?)

That gives the club money up front for season tickets sales, to pay the current running expenses when the income streams are at their worst.

If you have £5m coming in shortly from the League why would you mortgage that and the season tickets for the sake of £1m and a cost of £200K. This part of the income cannot be assigned to a third party anyway without league approval, and would lead to a transfer embargo - existing rule not new. So i am guessing the £1m financing is related to season tickets, part of normal advances which are staged and in the manner i described above

The new league rules were adopted for league 1 and 2 with those rules to be worked towards next year for the Championship as it was reported on BBC and as I understand it.

I guess it is all in how it gets reported and what slant you are trying to put on it

Spoke to guy at Ricoh about season tickets last week, reckoned they were well over 9000 sold and expect over 10000, and that Leicester will be one of the biggest crowds at the Ricoh we have had.

lordsummerisle · Jul 11, 2011

Nonleagueherewecome said:
Are you calling Joe Elliott, and Gary Hoffman, liars? And you think Brody et al are telling the truth?! Think I'll side with the Coventry fans who've been on the board with this one...

Uncle Joe Elliott taken his time to come over all full disclosure hasn't he?

How many years, and under how many owners/chairmen has he been on the board?

oldskyblue58 · Jul 11, 2011

Second question ................On the basis that the investors in the Sisu private equity funds are not prepared to loan the club further monies, what would you have the Board do to meet the bills in a period where our income is at its lowest and therefore our losses greatest ?

Do they take whatever action they can to keep us going or do we just give up and go into administration?

mattylad · Jul 11, 2011

lordsummerisle said:
Uncle Joe Elliott taken his time to come over all full disclosure hasn't he?

How many years, and under how many owners/chairmen has he been on the board?

He goes back to the Pointon era where he sponsered the youth team for many years.

grego_gee · Jul 11, 2011

oldskyblue58 said:
Spoke to guy at Ricoh about season tickets last week, reckined they were well over 9000 sold and expect over 10000, and that Leicester will be one of the biggest crowds at the Ricoh we have had.

ok! if we have already had income for 9000 season ticket sales. (how much is that worth?) and why do we need to borrow more money?

crowsnest · Jul 11, 2011

As for the season tickets, City are expecting to sell around 9,500 for the forthcoming campaign which will generate somewhere in the region of £3-£3.5million for the club.

Really - thats an average of £315 per season ticket. Are we all buying adult premium seats?

oldskyblue58 · Jul 11, 2011

grego_gee said:
ok! if we have already had income for 9000 season ticket sales. (how much is that worth?) and why do we need to borrow more money?

check what i wrote to start with........... technically the finance company has advanced sums against the season tickets being bought by direct debit...... they havent been paid for in full yet .... is technically a borrowing

oldskyblue58 · Jul 11, 2011

I dont have any sense of surprise in these "revelations" reported by the CT. This isnt the first time that a seasons ticket sales have been "borrowed" against. It certainly wont be all season ticket sales - only those on direct debit. It is quite likely that the monies will be on a staged basis to reflect the collection pattern and when direct debit agreements start. To be honest I think it is a bit of a non story. If the club has borrowed against the League "pot" it is due then thats a different matter because we would be under an embargo and is news worthy - but so far there is nothing to say we are under embargo only speculation - but could this be another reason why no new players at the moment, except we have two new keepers dont we

Think what is more interesting is the agenda behind this snippett of "news". Why state it now in a blaze of publicity on the CT when we have done the same for season tickets in years before and nothing said? Who is this source of info close to SISU? The article doesnt say mortgaged it says "effectively mortgage" think they are playing with words. Why would all money from season tickets go to the finance company when some is received in cash or credit cards.

I definitely think the agenda behind this story is far more interesting - my guess is CT and others are going to be conducting a press campaign to weaken SISU's position in negotiations. I suppose ok if they end up going but what if they dont? From past experience I wouldnt believe or be taken in by all that appears in the CT

grego_gee · Jul 11, 2011

That is each individual borrowing for his season ticket. The Finance co provides the money up front for the individual which goes straight to CCFC. That can't be the borrowing in the headline!

rob9872 · Jul 11, 2011

9000 includes all the corporate freebies. The woman I asked in the club shop on Saturday said that they had sold 7,500 so far (500 up on the same last year).

An adult is approx £300 but will also include all the concessions of OAP's, students, JSB's etc. My estimate (ok guess) is that the average price paid will be £220 which would equate to revenue of only £1.65m.

grego_gee · Jul 11, 2011

rob9872 said:
9000 includes all the corporate freebies. The woman I asked in the club shop on Saturday said that they had sold 7,500 so far (500 up on the same last year).

An adult is approx £300 but will also include all the concessions of OAP's, students, JSB's etc. My estimate (ok guess) is that the average price paid will be £220 which would equate to revenue of only £1.65m.

What's a corporate freebie? - I thought there was no such thing as a free lunch? - you can't be telling me you gave away 1500 free season tickets!
Anyway £1.65m in the back + receipts for Gunner? maybe £350k would be £2m in the bank. WHY do we need to borrow an extra £1m at a cost of £200k?

Nonleagueherewecome · Jul 11, 2011

But it does say they've borrowed against the league "pot" as well.

oldskyblue58 · Jul 11, 2011

Lets be honest this is all hearsay, he said, she said, conspiracies and supposition.......... we have not been given any verifiable facts, and the club actually have no legal obligation to disclose its affairs to all and sundry. Makes a good story though doesnt it. we wont know even half the story until we go into administration or the next accounts come out. Guess we wait for the "29th" then

Godiva · Jul 11, 2011

oldskyblue58 said:
I dont have any sense of surprise in these "revelations" reported by the CT. This isnt the first time that a seasons ticket sales have been "borrowed" against. It certainly wont be all season ticket sales - only those on direct debit. It is quite likely that the monies will be on a staged basis to reflect the collection pattern and when direct debit agreements start. To be honest I think it is a bit of a non story. If the club has borrowed against the League "pot" it is due then thats a different matter because we would be under an embargo and is news worthy - but so far there is nothing to say we are under embargo only speculation - but could this be another reason why no new players at the moment, except we have two new keepers dont we

Think what is more interesting is the agenda behind this snippett of "news". Why state it now in a blaze of publicity on the CT when we have done the same for season tickets in years before and nothing said? Who is this source of info close to SISU? The article doesnt say mortgaged it says "effectively mortgage" think they are playing with words. Why would all money from season tickets go to the finance company when some is received in cash or credit cards.

I definitely think the agenda behind this story is far more interesting - my guess is CT and others are going to be conducting a press campaign to weaken SISU's position in negotiations. I suppose ok if they end up going but what if they dont? From past experience I wouldnt believe or be taken in by all that appears in the CT

As always you are just about the only resonable voice here - so be carefull mate, by offering a rational explanation to all the CT heresay and planted spin, you actually might end up a target for all those who rather want to believe the Hoff side of the story.
But then again, maybe not - they probably don't read your posts, and if they did, they wouldn't understand what you are telling them.

But you certainly deserves credit for keep trying.
It's refreshing that you don't take sides - one or the other. You are just plain straight and try to present facts.

Please keep it coming ...

covcity4life · Jul 12, 2011

get a room

blueflint · Jul 12, 2011

my faith is in the fans not bothered about other parties as fans we will support our club through thick and thin

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