Osb.... (1 Viewer)

[Mary_Mungo_Midge]

Given the current gridlock situation on contract discussions, couldn't SISU lease the stadium from ACL for a duration that aligned itself with their commitment to fund the club?

Therefore, SISU get the income they incessantly elude to for a predetermined period, the council gets income but also the kudos of being able to say they've used their leverage to force the owners to stand behind their club, and the club gets promised income and the spectre of embargoes a thing of the past.

Not saying I would want this to happen, but could/would it suit all parties - given we are where we are?!?

 

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[oldskyblue58]

Interesting idea MMM

ok what we know

- CCFC have a 40 year lease of the stadium at £1.2m per annum started 2005
- SISU struggle to confirm its support for the clubs finances on an annual basis
- ACL have a 10 year agreement with Compass to run the stadium on a joint venture share of profits basis
- ACL gets all rental income from the Ricoh plus joint venture share , the Council and Charity receive no income from it
- the council own 50% of ACL as does Charity each can veto a sale of the others shares
- no dividend on the shares can be paid

I am afraid if you look behind the scenes it gets even more complicated.

To do what you suggest would require an annual licence (because SISU wont commit more than 1 year),
it would mean breaking the existing lease that CCFC has which because it is 40 years provides some stability and longevity,
It would mean breaking the contract with Compass who could quite rightly demand compensation from ACL.
It might also leave ACL short in terms of repaying its own loan commitments putting that company at risk and the ownership of the stadium.
CCFC would have to pay a franchise fee for the income sources which might not leave much for more player funds

CCFC would have additional turnover to use for the FFP rules but it would also require additional costs in terms of bar/restaurant purchases, wages etc.

Perhaps what should have happened was that when the contract to run the stadium came up (what Compass does http://www.newswiretoday.com/news/48701/ ) the club should have submitted their own bid. Could have done their own joint venture with ACL. They could have sub franchised the running to Compass or someone similar. That would have given them turnover and profit to use. They would still have the rent to pay but it would have been a more viable business.

Said before but SISU and RR really didnt understand the business as a whole. RR might have thought he had a handle on the football side SISU the finances of a business but neither seem to have looked into how the stadium side of it fit the proposal and have missed significant opportunities to improve secure and take CCFC forward imo

Like your thinking though MMM made me think too

 

[Bill Glazier]

Oldskyblue58, I'm impressed with your grasp of the situation - you should be involved in the negotiations!

Please excuse my ignorance, but would it ever be possible for a Higgs, ACL consortium to take over the club? ACL might not want to and Higgs might not want to, or be legally able to. I'm just curious.

 

[oldskyblue58]

In theory yes ACL could but I can not believe they would be keen to take on that debt. I think Charity rules would exclude the Charity from doing so. Similarly the council would be excluded by local government rules from being directly involved

 

[Brighton Sky Blue]

Is the length of the lease not negotiable OSB? Fetch the club some breathing space by cutting rent down by a few hundred grand a year (example) and extending the lease accordingly?

 

[Mary_Mungo_Midge]

Thanks for the input OSB. It does seem very short sighted from the club's perspective to allow ACL to sign a 10-year deal for exclusive rights to The Ricoh a year or so after they took over, if it were ever their long term ambition to seek ownership. The size of the deal - if it's to be believed at £125m - was always surely going to prove a stumbling block to stadium-ownership once contracted?

I don't suppose you have any insight as to how Compass are faring against their contract, do you? They'd have signed on the cusp of a brave new dawn, and can't be enthused about the idea of third tier football. That stated, I guess - like ACL - that their Ricoh income won't be wholly a function of football-related activity?!?

 

[Bill Glazier]

Thanks OSB - if the debt was written off all or in part by Sisu would ACL be interested - or do they want nothing to do with CCFC?

 

[oldskyblue58]

BSB - change the terms of the lease and it is a new lease, so in a sense it is negotiable. However it may be that the terms of the borrowings ACL have are linked into the lease covenants they have so it might not be so easy. CCFC have to prove in cold hard and verified facts their financial position for a variation to be considered

MMM - I dont suppose Compass are that happy no, but they are able to cut costs where appropriate to match income as many of the staff are not full time. Compass are also a huge international business with many clients and venues, the Ricoh is only a small part. Aside from the football the Ricoh appears pretty busy

BG - writing off the debt would help yes but ACL I think would much prefer to stick to its core business and not the much more risky business of football. If they got involved and CCFC continued to under perform and make losses then it could bring the whole stadium to its knees.

cheers
OSB