Renting Vs Ownership (1 Viewer)

[skybluetony176]

If the club buy the Ricoh or build their own stadium I guess they'll be borrowing the money from Arvo? If you take £ 40 million as a rough amount to do either of these would that be about right? Isn't our current debt to Arvo around this amount and we pay £1.8 million a year interest on this. So if you double the amount borrowed would rule of thumb not follow that the interest payments would double also to around £ 3.6 million a year?

If I'm correct on all the above and we took ACL's last rental offer of £150,000.00 the club could pay the rent for 24years with one years interest payment to Arvo. So how is ownership the best option for the club?

Surely the best option for the club is a rent deal that includes full access to the match day revenue. All we need is sisu to get around a table with ACL and make a deal with the offer through the FL as a starting point.

 

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[Astute]

I could be wrong but I thought that the ARVO loan was much lower than 40m. Not even half of the 40m.

It wouldn't make financial sense to spend so much on a stadium build or purchasing the Ricoh as it is said that we are in debt by up to 70m, although a lot of this is management fees and interest. So not money paid out. But it would put a Division 3 club in debt by about 100m

 

[skybluetony176]

I could be wrong but I thought that the ARVO loan was much lower than 40m. Not even half of the 40m.

It wouldn't make financial sense to spend so much on a stadium build or purchasing the Ricoh as it is said that we are in debt by up to 70m, although a lot of this is management fees and interest. So not money paid out. But it would put a Division 3 club in debt by about 100m

So based on that. If we did borrow £40m of arvo we could actually rent the Ricoh for 36years for 1years interest payment to Arvo?

Now, have I just got my maths completely wrong (not my best subject in school and I don't mind admitting it) or is anyone who is pushing for sisu ownership of any stadium trying to send us down the river.

 

[Jack Griffin]

The ARVO part of the debt was £11,653,000 in May 2013. Current liabilities were £45.2M.

I suspect some more money was borrowed this season.

OSB summarised the financial facts. http://www.skybluestalk.co.uk/threa...-amp-Leisure-2013-accounts?highlight=Accounts

 

[Rusty Trombone]

So based on that. If we did borrow £40m of arvo we could actually rent the Ricoh for 36years for 1years interest payment to Arvo?

Now, have I just got my maths completely wrong (not my best subject in school and I don't mind admitting it) or is anyone who is pushing for sisu ownership of any stadium trying to send us down the river.

Every political, economic and sports pundits agree that Coventry City must own its own stadium. No figures are required to back this up, Joy has spoken, and her word is her bond.

 

[Astute]

The amount of debt our club already has and the amount of debt that would be added if SISU actually paid a half decent price are the main reasons I see for them to even be trying to rip off Higgs for just 2m to get a half share of ACL and will never offer a decent price for the rest of it.

And before anyone starts having a go about the attempted ripoff of Higgs just remember the judge agreed.

 

[skybluetony176]

Every political, economic and sports pundits agree that Coventry City must own its own stadium. No figures are required to back this up, Joy has spoken, and her word is her bond.

Very true. I'd forgotten that. That also explains why we've never seen her. It would take years to speak with "every" political, economic and sports pundit in the world.

 

[chiefdave]

You've forgotten to factor in the £10m a year pie profit :laugh:

 

[Terry Gibson's perm]

The way they talk about the pie money you would think the fans are buying millions a year and whenever I went in the corporate side it was never near to full and getting emptier (I still kept paying for my season ticket while getting a corporate ticket as my company paid over £70 per month per ticket and couldn't give them away most weeks so they are delighted with the move as it has saved them around 6k over the rest of the contract).

:blue:

 

[wingy]

So based on that. If we did borrow £40m of arvo we could actually rent the Ricoh for 36years for 1years interest payment to Arvo?

Now, have I just got my maths completely wrong (not my best subject in school and I don't mind admitting it) or is anyone who is pushing for sisu ownership of any stadium trying to send us down the river.

Yeah ,or alternately they could have payed £12.5M. to buy out the council loan ,pay off Higgs ,have a hundred year lease @ £120K per an + Interest .

 

[RFC]

You've forgotten to factor in the £10m a year pie profit :laugh:

Wrong it's nothing to do with profit, just gross turnover!

 

[chiefdave]

Wrong it's nothing to do with profit, just gross turnover!

SISU tell us the club is losing millions a year, according to you to resolve this we don't need profits just increased turnover?!? Do you actually understand the difference between profit and turnover?

 

[Huckerby]

SISU tell us the club is losing millions a year, according to you to resolve this we don't need profits just increased turnover?!? Do you actually understand the difference between profit and turnover?

Leave RFC alone i think he did REALLY well to avoid the real question here

 

[Grendel]

SISU tell us the club is losing millions a year, according to you to resolve this we don't need profits just increased turnover?!? Do you actually understand the difference between profit and turnover?

On this and in this league he is correct. Turnover determines the amount that can be spent on wages not profit or loss.

I would guess less than 5% of clubs make a profit.

 

[Astute]

Wrong it's nothing to do with profit, just gross turnover!

Is gross turnover the turnover of Joy?

 

[CCFC PimpRail]

Every political, economic and sports pundits agree that Coventry City must own its own stadium. No figures are required to back this up, Joy has spoken, and her word is her bond.

Eh, I hope you're joking...? Where are the economic principles in that. You might be right if the club had no debt and was making a profit, but the club will never own it's own stadium. Even if Sisuck build one, it'll still be with borrowed money. I was told that the while Ricoh complex is probably the most diverse in the country, and that is because it isn't owned by a football club. Others can only manage a few naff weddings and David Brent style conferences.

 

[Kingokings204]

Coventry city don't need to own the stadium. That's the end of it for me. A rental long lease deal with revenue access is just the ticket.

 

[skybluetony176]

On this and in this league he is correct. Turnover determines the amount that can be spent on wages not profit or loss.

I would guess less than 5% of clubs make a profit.

Turn over determines how much you are aloud to spend it doesn't determine how much you have available to spend. We'll have a lot more in the kitty from paying £150k a year rent there will be a lot more in the kitty than if you're paying £3.2m a year in interest charges.

 

[chiefdave]

On this and in this league he is correct.

You're going yo have to explain this to me as I'm not getting it. We are currently losing millions every year, let's say £5m.

If we increase turnover but have no increase in profit how do we:
a) achieve break even (or reduce losses)?
b) increase the playing budget under FFP without increasing losses?

 

[skybluetony176]

You're going yo have to explain this to me as I'm not getting it. We are currently losing millions every year, let's say £5m.

If we increase turnover but have no increase in profit how do we:
a) achieve break even (or reduce losses)?
b) increase the playing budget under FFP without increasing losses?

We'll worry about the losses tomorrow. What's the worst that could happen. Don't you know, tomorrow never comes ;-)

 

[play_in_skyblue_stripes]

Coventry city don't need to own the stadium. That's the end of it for me. A rental long lease deal with revenue access is just the ticket.

Coventry City just needs to play in city of Coventry it's as simple as that. Nothing else makes any sense.

 

[Kingokings204]

Coventry City just needs to play in city of Coventry it's as simple as that. Nothing else makes any sense.

It should be that simple. Low rental deal with revenue access. It's how most other teams all do it.

 

[Ian Coventry]

The amount of debt our club already has and the amount of debt that would be added if SISU actually paid a half decent price are the main reasons I see for them to even be trying to rip off Higgs for just 2m to get a half share of ACL and will never offer a decent price for the rest of it.

And before anyone starts having a go about the attempted ripoff of Higgs just remember the judge agreed.

Absolutely right the judge agreed with Sisu that they do not owe the Higgs charity £29,000 and decreed they do not have to pay it , he found in Sisu' favour, yes he denied Sisu 'claim of £290,000 but it was just a counter claim, they never expected it to succeed, Higgs instigated the court action and lost, thanks for pointing that out.

 

[ccfcway]

On this and in this league he is correct. Turnover determines the amount that can be spent on wages not profit or loss.

I would guess less than 5% of clubs make a profit.

Well then, maybe they should speak to ACL, their turnover this year is £14 million and increasing

 

[Rusty Trombone]

Absolutely right the judge agreed with Sisu that they do not owe the Higgs charity £29,000 and decreed they do not have to pay it , he found in Sisu' favour, yes he denied Sisu 'claim of £290,000 but it was just a counter claim, they never expected it to succeed, Higgs instigated the court action and lost, thanks for pointing that out.

I imagine you know best, but I thought when they turned up with 7 lawyers they were trying their hardest to make it succeed.

 

[dongonzalos]

On this and in this league he is correct. Turnover determines the amount that can be spent on wages not profit or loss.

I would guess less than 5% of clubs make a profit.

And where would we achieve the highest turnover. Renting at Sixfields whilst we build our stadium. Or renting at the Ricoh?

 

[dongonzalos]

Absolutely right the judge agreed with Sisu that they do not owe the Higgs charity £29,000 and decreed they do not have to pay it , he found in Sisu' favour, yes he denied Sisu 'claim of £290,000 but it was just a counter claim, they never expected it to succeed, Higgs instigated the court action and lost, thanks for pointing that out.

Yes he denied the SISU claim but let's just ignore that and move on. Classic

If SISU had won said claim I am absolutely certain you would be telling us all that counts for noting as well

 

[dongonzalos]

Well then, maybe they should speak to ACL, their turnover this year is £14 million and increasing

Correct if SISU had bought half of ACL like SISU agreed to 7 million and increasing. I would do a whistle if I could

 

[Astute]

Absolutely right the judge agreed with Sisu that they do not owe the Higgs charity £29,000 and decreed they do not have to pay it , he found in Sisu' favour, yes he denied Sisu 'claim of £290,000 but it was just a counter claim, they never expected it to succeed, Higgs instigated the court action and lost, thanks for pointing that out.

SISU won?

So what did they win other than a legal bill of more than what the case was about? Higgs didn't get their money as the judge decided that neither side wanted to complete the deal. So SISU can't blame anyone for it not happening now, although it hasn't stopped Joy from trying. If that was a win for SISU what would a defeat have to be in your eyes?

 

[bigfatronssba]

Absolutely right the judge agreed with Sisu that they do not owe the Higgs charity £29,000 and decreed they do not have to pay it , he found in Sisu' favour, yes he denied Sisu 'claim of £290,000 but it was just a counter claim, they never expected it to succeed, Higgs instigated the court action and lost, thanks for pointing that out.

No one lost in this court case. Are you seriously ignoring the judges comments that it was a "nil-nil draw".

In this long running saga the only side that has ever lost is Sisu. In December 2012 for non payment of rent.

 

[italiahorse]

Absolutely right the judge agreed with Sisu that they do not owe the Higgs charity £29,000 and decreed they do not have to pay it , he found in Sisu' favour, yes he denied Sisu 'claim of £290,000 but it was just a counter claim, they never expected it to succeed, Higgs instigated the court action and lost, thanks for pointing that out.

What was the reasons for the £290,000 claim other than trying to scare Higgs by taking it to a higher court ?

 

[Neutral Fan]

Sorry to bring Northampton Town into this but the local council sold them a 150 year lease for a quid a few years back. That included surrounding land now sold by the club for housing, hotels etc.

They're using this money to expand the ground in time for the new season including more corporate facilities.

Even 4th division clubs (if they stay up!) need non-match revenue to survive. A club needs to own its own ground or own a long leasehold on it.

 

[chiefdave]

Even 4th division clubs (if they stay up!) need non-match revenue to survive. A club needs to own its own ground or own a long leasehold on it.

Exactly right but the problem is our owners insist ownership is the only viable option and dismiss a long leasehold.

 

[Astute]

Sorry to bring Northampton Town into this but the local council sold them a 150 year lease for a quid a few years back. That included surrounding land now sold by the club for housing, hotels etc.

They're using this money to expand the ground in time for the new season including more corporate facilities.

Even 4th division clubs (if they stay up!) need non-match revenue to survive. A club needs to own its own ground or own a long leasehold on it.

The Ricoh is worth more than a quid whereas....

 

[Jack Griffin]

Sorry to bring Northampton Town into this but the local council sold them a 150 year lease for a quid a few years back. That included surrounding land now sold by the club for housing, hotels etc.

They're using this money to expand the ground in time for the new season including more corporate facilities.

Even 4th division clubs (if they stay up!) need non-match revenue to survive. A club needs to own its own ground or own a long leasehold on it.

That ground only cost £6M to build in 1994-5. http://www.stadiadirectory.com/stadia-directory-sixfields-stadium-northampton/

It was costing Northampton Borough Council £300K a year to run, that as much as anything is why they wanted shot of it.
The full costs of running the ground now fall upon Northampton Town FC. http://www.northamptonchron.co.uk/news/ten-years-of-action-1-902967

The £12M NTFC have obtained from NBC is a loan and shall be paid back from profits from an associated a housing scheme and small scale local retail development on land, upon which the football club have a 150 year lease, as well as adjacent land near the stadium. http://www.constructionenquirer.com/2013/07/04/northampton-town-to-get-12m-stadium-revamp/

This was not a gift, it was a sound & hard headed business decision. Not utterly dissimilar in nature to the one CCC made to develop the Arena area.