Keys - this takeover will take a while (1 Viewer)
- Thread starter AFCCOVENTRY
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Paxman II
Well-Known Member
Here's my problem...
Knowing the fans and support for the club is at an all time low and relegation looks almost certain uless there is a revival of mega proportions on the pitch why would you not want to issue a statement on behalf of both sides to suggest that talks are at least progressing with a view to saving CCFC from it's current plight?
No one is saying it will happen, no one suggesting what kind of deal...just creating some good will at a dark time for the club in need of a fix.
If either side (SISU or GH) had the clubs interest at heart in all seriousness why not at least do that? Instead we have to listen to rumour, speculation and conjecture while remaining completely in the dark from one week to the next and comments from former legends just to add more nonsense to the whole mess we see our club in.
We have Key's with the odd tweet which is hardly something the everyday fan is going to pay attention to. With the track record of GH and the infamous bid of £1 on scrap paper nonsense I think confidence in him is not exactly high is it? Certainly not from where I see it.
Knowing the fans and support for the club is at an all time low and relegation looks almost certain uless there is a revival of mega proportions on the pitch why would you not want to issue a statement on behalf of both sides to suggest that talks are at least progressing with a view to saving CCFC from it's current plight?
No one is saying it will happen, no one suggesting what kind of deal...just creating some good will at a dark time for the club in need of a fix.
If either side (SISU or GH) had the clubs interest at heart in all seriousness why not at least do that? Instead we have to listen to rumour, speculation and conjecture while remaining completely in the dark from one week to the next and comments from former legends just to add more nonsense to the whole mess we see our club in.
We have Key's with the odd tweet which is hardly something the everyday fan is going to pay attention to. With the track record of GH and the infamous bid of £1 on scrap paper nonsense I think confidence in him is not exactly high is it? Certainly not from where I see it.
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oldskyblue58
CCFC Finance Director
buying 50% of the shares in ACL would neither reduce the rent nor increase income BSB
mark82
Moderator
How do you come to that conclusion? You cannot lease half the stadium at the same price as 50% and if you own 50% surely you would be due 50% of any profit.
mark82
Moderator
And rent on the food/drink outlets.
oldskyblue58
CCFC Finance Director
because they are not buying 50% of the stadium they are buying 50% of the shares in ACL. The only way you get a return on shares is by dividend and as ACL cannot legally pay dividends (because it has a negative P&L account)and has no plans to vote any dividends then there is no additional income.
ACL is an entirely seperate legal entity that owns the long lease on the stadium. CCFC is another seperate legal entitity that sub leases the use of the stadium. There is no connection between owning the shares and reducing the rent. If you owned shares in Barclays bank it doesnt entitle you to a discount on your bank charges or even free banking its the same principle.
The concerts etc are operated as a joint venture between ACL and Compass I believe Otis. As such that entitles ACL to receive its share of any profit or loss on that joint venture. The profit goes into the ACL coffers and for the same reasons as above no income is distributed to shareholders
If they bought 50% of the freehold then it would be in partnership with the council ACL would still own the long leasehold and other income sources. CCFC would receive 50% of the rent ACL pays but most likely pay it out as interest on loans. CCFC would still need to pay rent to ACL at full value
ACL is an entirely seperate legal entity that owns the long lease on the stadium. CCFC is another seperate legal entitity that sub leases the use of the stadium. There is no connection between owning the shares and reducing the rent. If you owned shares in Barclays bank it doesnt entitle you to a discount on your bank charges or even free banking its the same principle.
The concerts etc are operated as a joint venture between ACL and Compass I believe Otis. As such that entitles ACL to receive its share of any profit or loss on that joint venture. The profit goes into the ACL coffers and for the same reasons as above no income is distributed to shareholders
If they bought 50% of the freehold then it would be in partnership with the council ACL would still own the long leasehold and other income sources. CCFC would receive 50% of the rent ACL pays but most likely pay it out as interest on loans. CCFC would still need to pay rent to ACL at full value
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Delboycov
Active Member
Not comparing their achievements ICHAN, I'm comparing the role they're playing as mouthpieces for the respective parties. Sillett will always be a 'legend' and a hero to me but I personally think he's wrong to get involved in something where feelings are running so high...his comments about GH border on slanderous and no matter what he did for this club, that's out of order. I think Richard Keys should also shut his mouth and just let them get on with it...No more building up hopes or winding fans up. That isn't too much to ask for is it?
ashbyjan
Well-Known Member
As I understand the ACL situation. and please correct me if I am wrong OSB, ACL does make an operating profit but this is all used to pay off the £20 million loan it has to service and anything left is reinvested back into the business to improve the infrastructure etc leaving nothing to be be paid to the share holders. It is this reinvestment portion that would stop the council selling to SISU or Hoffman unless they could be assured that the owners of the leasehold will continue to grow the business and not just cream off any profits short term and have no long term plan for the building they own the freehold on.
oldskyblue58
CCFC Finance Director
thats spot on to what i know jan. All profits are to be reinvested or used to pay debt off not distributed to shareholders
In addition no company can distribute profits unless there are distributable reserves to do so (ie a positive balance). ACL shows a negative position circa £2m. There is no income coming out to any of the owners any time soon
In addition no company can distribute profits unless there are distributable reserves to do so (ie a positive balance). ACL shows a negative position circa £2m. There is no income coming out to any of the owners any time soon
mark82
Moderator
So why bother buying it?
@richh87
Member
Thanks Richard Branson.
It is a big complicated deal; mostly due to the arena situation and the fact that SISU are a bunch of faceless investors. God knows what process they have to go through to negotiate a bid. Not to mention Hoffman's consortium need consulting on developments.
If they genuinely don't want to sell then they'll dig their heels in too.
I think SISU may have tested their determination to keep City up throughout January hoping they'd agree to their demands in time to reinforce us.
Surely with us likely being in league 1 next season the price should go down. But then SISU aren't concerned with that the club is ACTUALLY worth - they want the money they put in back.
oldskyblue58
CCFC Finance Director
That is a very good question. The only reason I can think of is to take a longer term view utilise the option to buy at a less than market value 50% with a plan to buy the rest later. We dont even know if the Charity or Council would approve the sale, certainly I know they would require any shareholder to invest in the site so paying £10m for the shares isnt going to be enough of a comittment
so here is another question - would the £10m to buy the option be better spent in team building ............providing a better team and results, increasing crowds and revenue ? or even perhaps spent on purchasing the rights to some of the income streams ? In the short term both seem better options than tying up £10m with no return
oldskyblue58
CCFC Finance Director
Actually @richh87 i wouldnt expect the investors are involved much. They have appointed SISU to deal with all matters on their behalf. I would guess the only time they will be consulted will be if a deal is arrived at between GH & SISU, they may be asked to approve it at that point. But they may not be involved at all - if CCFC is a very minor part of a huge pot then the deal will be done on SISU's say so. Kind of operates like an insurance company investment policy - the investors give their investment criteria and the fund manager gets on with it, he doesnt seek approval for buying or selling any of the investments within the fund you buy into
@richh87
Member
Fair enough. Still more complicated than most football club purchases i'd imagine.
oldskyblue58
CCFC Finance Director
certainly seems that way ......... we just have to be patient i guess
rob9872
Well-Known Member
Surely the long term merit would be that we don't pay in excess of £1m per season rent and the short term would be that if we can attain Premiership status, then owning our own ground would make us a much more viable acquisition for other investors if the plan is to ever make a profit out of the initial purchase (which as non-fans you would expect is their aim).
I appreciate that the other income streams could help us achieve those scenarios, including the benefit of the next naming rights which could be anything depending on where we are at the time, but if we have genuinely serious investors then lock-stock and barrel has to be the way.
Paxman II
Well-Known Member
If you buy enough shares then you end up owning the company. 50% would give you half ownership of ACL, the company that has the long term lease of the Ricoh Arena and benefits from all it's operations....be it ploughing the 'profits' back in at present or not. that is the golden ticket option that has been there since day one years ago for a price of £10m. That option as I understand it runs out this year....
...and low and behold GH is back at the table with the possibility of investors wanting to invest.
It's no surprise also that a lease such as this can be used for loan purposes in the banking sector so getting it would be very important...even 50% of it for now. Without it then I don't think GH would even be talking.
...and low and behold GH is back at the table with the possibility of investors wanting to invest.
It's no surprise also that a lease such as this can be used for loan purposes in the banking sector so getting it would be very important...even 50% of it for now. Without it then I don't think GH would even be talking.
ICHAN
Well-Known Member
I fully agree with you Delboycov.
They should all keep it shut and just let the process take place, however long it takes.
As you say non of it helps, no matter who is saying things, because all it does is wind the fans up and divides them, as if we need any of that right now.
coundonskyblue
New Member
I think it the option ends in 2015, pretty sure it was 10 years from the Ricoh opening.
Stoppercurtis
New Member
Perhaps like us he's just is getting a bit frustrated with the whole thing? JS has always come out and say what he thinks. This guy is Sky Blue through and through he joined us in 1962/3 I think? Great full back and we know the rest. I think he is saying what he is saying because concerned that time is running out for us. He knows from personal experience how tuff it is to get promoted from any division. New owners, new money, new manager a chance to stay up.
Stopper
Stopper
Delboycov
Active Member
Totally agree with all that ICHAN and I think because the affection all fans hold for Sillett a lot have been influenced by his comments. He has implied that GH hasn't got the backing because of the delay in coming to an agreement...an impartial person would realise the delay could be being caused by the other parties involved and keep it shut. I would say the same goes for keys and his totally biased opinions...
J
Jack Griffin
Guest
So to my way of thinking SISU will probably sell in 2014. They'll get a better price then, but won't have to pay for the option, the value of which will be going up for a few years yet.
Jim
Well-Known Member
OSB - surely if CCFC purchased 50% of the share capital of ACL then CCFC and the council would run ACL as a joint venture.
In this instance the accounts of ACL could be proportionately consolidated into the consolidated CCFC accounts. Therefore 50% of the revenue of ACL would be shown in CCFC group accounts (in addition to expenses).
This would also have the effect of reducing the net cost of rent as 50% of rent paid is revenue attributable to CCFC group. On consolidation this rent revenue and proportion of cost must be netted off against each other.
oldskyblue58
CCFC Finance Director
Hear what you are saying Jim but 50% isnt control and ACL would be an associated company not subsidiary. Control effectively would remain with the council who own the freehold and are therefore the dominant shareholder. There is also a profits formula included in ACL accounts that gives the council a greater return over certain levels of profit - that again points to the council being the dominant party in a 50:50 split. Unless there are "golden shares" that place control to specific shareholders etc but we have no info on that. Would depend on the agreement reached as to how consolidated or not. Just my opinion though
Consolidating the accounts doesnt stop CCFC paying rent to ACL and i understand the consolidation adjustments. Both the council and charity have made it quite clear that there will be no distribution of reserves from ACL until such time as the loans are paid off ( approx 12 years time ) I do not expect that to change even with CCFC owning up to 50%. So even if consolidation might be appropriate it doesnt mean that CCFC get more income just that the value of the investment gets greater - the area that consolidation may help is in showing greater attributable income to be used in the financial fair play rules. As things stand consolidating the figures wont give CCFC more cash to spend but it may improve profits a little.
All academic at the moment because there has been no agreement to sell and the Charity can refuse to accept the sum under the option held by CCFC Ltd. The option does not force the Charity to sell
Consolidating the accounts doesnt stop CCFC paying rent to ACL and i understand the consolidation adjustments. Both the council and charity have made it quite clear that there will be no distribution of reserves from ACL until such time as the loans are paid off ( approx 12 years time ) I do not expect that to change even with CCFC owning up to 50%. So even if consolidation might be appropriate it doesnt mean that CCFC get more income just that the value of the investment gets greater - the area that consolidation may help is in showing greater attributable income to be used in the financial fair play rules. As things stand consolidating the figures wont give CCFC more cash to spend but it may improve profits a little.
All academic at the moment because there has been no agreement to sell and the Charity can refuse to accept the sum under the option held by CCFC Ltd. The option does not force the Charity to sell
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Jim
Well-Known Member
With 50% shareholding CCFC would have the option of negotiating a joint venture with the council to allow consolidation. This should be an aim as the most important aspect of consolidating the accounts would the rise in declared revenue. This should help ease the shackles of the fair play rules on player salaries...?
oldskyblue58
CCFC Finance Director
Yes it should help with the fair play rules - which would allow us to pay out more wages but it wont provide more cash with which to pay them though - which is the catch. ACL/Council/charity has no plans to distribute any funds from ACL and cant legally at the moment any way. That means any CCFC owner has to fund the cashflow shortage.
