SkyBlueSwiss
New Member
Old Sky Blue,
I have a question for you if I may.
I can only follow things from a distance and I have no contacts in or around the club, so I must rely totally on online reporting, some of which seem quite dubious.
I take many posts on here with a large pinch of salt as emotions can get very high (as can mine, which is why I snipe accasionally at Grendel and Torch for being so dogmatic - sorry guys, but I get emotional about the club too!)
My question to you concerns the "rent" and whether this might indeed be a large misnomer and that is what makes it seem so unfair when in fact it is not really rent. Bear with me a moment while we look at what little I can reconstruct of the history.
CCFC, under the old regime(s), sold us down the river (apparantly) by selling Highfield Road without us having a replacement ground to go to yet. The brownsite that became the Ricoh proved to be a financial step too far and the then management grossly miscalculated and ran out of funds, leaving the club with no future place to play in and looking at extinction.
In rides the council and the Higgs Trust on white horses to save the day by forming an operating company called ACL, who obtained the financing to build and complete the Ricoh. To do this, ACL had to reach out to the financial markets and borrow a substantial amount of money at what were substantial interest rates back then compared to the extremely low interest rates available today.
ACL therefore have a very large interest bill, a loan repayment schedule and all of the normal operating costs of a company managing a complex such as the Ricoh arena. They recover a significant portion of those costs through the conference centre, casino, hotel and other facilities, and they must also recover a part of their financial outlay, financing costs and operating costs from the football club they saved from extinction.
Now apart from the olympic year, ACL have never made large profits as I understand it, but have been covering their financial and operating costs by a relatively small margin, and have been using that small margin to pay down the loan principal, which had reduced from the original 21m to around 15-16m (not sure exactly).
To accomplish this, they have from the start in 2003? been charging CCFC a "rent" of 1.2m to cover the financial and operating costs the operating company was incurring by building the Ricoh and saving the club.
My contention is that the word "rent" is a misnomer that SISU and others have been using to play on the emotions of us supporters, because only a small portion of the 1.2m is in fact rent. The greater part of the 1.2m must surely be to cover the finance costs. the interest and the loan repayments, that CCFC would have to have been paying if ACL had not taken up the financing on behalf of the club.
So by looking at things in this manner, we have not been paying over the top for rent at all.
Additionally, the council went out and refinanced ACL at extremely favourable rates compared to what the Yorkshire was charging ACL since 2003, which meant that ACL's financial costs were dramatically reduced, which in turn meant that ACL was newly in a position to offer CCFC greatly reduced "rent" because their financial burden had been greatly reduced thanks to the councils actions.
And yet SISU still turned down this new agreement.
Bottom line is, of course 1.2m is a ridiculously high rent whether in the Championship or Division 1, but the point is that the 1.2m IS NOT RENT!
SISU has used this "rent" word to play on our emotions to try and cheat their way out of paying for the financial costs and operating costs of a company formed by the council and a trust to save the club from extinction.
SISU have very cleverly used the word "rent" to get the fans on their side and against the people who in fact saved, and are still doing their best to save, this club of ours.
I might have got some things wrong in this message, but I would ask you to look at the big picture I am presenting and not take umbrage at minor errors.
So my qustion OSB; am I factually correct or am I grossly misunderstanding the emotive word "RENT"?
I have a question for you if I may.
I can only follow things from a distance and I have no contacts in or around the club, so I must rely totally on online reporting, some of which seem quite dubious.
I take many posts on here with a large pinch of salt as emotions can get very high (as can mine, which is why I snipe accasionally at Grendel and Torch for being so dogmatic - sorry guys, but I get emotional about the club too!)
My question to you concerns the "rent" and whether this might indeed be a large misnomer and that is what makes it seem so unfair when in fact it is not really rent. Bear with me a moment while we look at what little I can reconstruct of the history.
CCFC, under the old regime(s), sold us down the river (apparantly) by selling Highfield Road without us having a replacement ground to go to yet. The brownsite that became the Ricoh proved to be a financial step too far and the then management grossly miscalculated and ran out of funds, leaving the club with no future place to play in and looking at extinction.
In rides the council and the Higgs Trust on white horses to save the day by forming an operating company called ACL, who obtained the financing to build and complete the Ricoh. To do this, ACL had to reach out to the financial markets and borrow a substantial amount of money at what were substantial interest rates back then compared to the extremely low interest rates available today.
ACL therefore have a very large interest bill, a loan repayment schedule and all of the normal operating costs of a company managing a complex such as the Ricoh arena. They recover a significant portion of those costs through the conference centre, casino, hotel and other facilities, and they must also recover a part of their financial outlay, financing costs and operating costs from the football club they saved from extinction.
Now apart from the olympic year, ACL have never made large profits as I understand it, but have been covering their financial and operating costs by a relatively small margin, and have been using that small margin to pay down the loan principal, which had reduced from the original 21m to around 15-16m (not sure exactly).
To accomplish this, they have from the start in 2003? been charging CCFC a "rent" of 1.2m to cover the financial and operating costs the operating company was incurring by building the Ricoh and saving the club.
My contention is that the word "rent" is a misnomer that SISU and others have been using to play on the emotions of us supporters, because only a small portion of the 1.2m is in fact rent. The greater part of the 1.2m must surely be to cover the finance costs. the interest and the loan repayments, that CCFC would have to have been paying if ACL had not taken up the financing on behalf of the club.
So by looking at things in this manner, we have not been paying over the top for rent at all.
Additionally, the council went out and refinanced ACL at extremely favourable rates compared to what the Yorkshire was charging ACL since 2003, which meant that ACL's financial costs were dramatically reduced, which in turn meant that ACL was newly in a position to offer CCFC greatly reduced "rent" because their financial burden had been greatly reduced thanks to the councils actions.
And yet SISU still turned down this new agreement.
Bottom line is, of course 1.2m is a ridiculously high rent whether in the Championship or Division 1, but the point is that the 1.2m IS NOT RENT!
SISU has used this "rent" word to play on our emotions to try and cheat their way out of paying for the financial costs and operating costs of a company formed by the council and a trust to save the club from extinction.
SISU have very cleverly used the word "rent" to get the fans on their side and against the people who in fact saved, and are still doing their best to save, this club of ours.
I might have got some things wrong in this message, but I would ask you to look at the big picture I am presenting and not take umbrage at minor errors.
So my qustion OSB; am I factually correct or am I grossly misunderstanding the emotive word "RENT"?
