SISU Irrationality (2 Viewers)

Not sure if you are Leonard, Paul or Ken, but thanks for that.

Malfie Henpox said:

I'm phoenix. Perhaps someone could tell me why they are so bad?

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They are very economical with the truth, and tbh they downright lie at times.

They are funding the losses but doing nothing to stop them and in fact to fund the losses are causing weakening of the club long term which will cause relegation.

Finally, despite the club being worthless and losing money they won't accept all other owners of failing businesses must accept. That their money is gone. Thus why they are holding the purchase of the club by someone who has the interests of the club as a priority and wants to turn us around.

Other than that they're great......

Ok big bollox what do u suggest?

Malfie Henpox said:

CCFC are skint. New owners won't alter that. If SISU are losing £250k plus a month, they should be applauded for keeping the club afloat, not pilloried.

You are asking someone to come in and give their money away. It's irrational.

Also, it's quite clear Hoffman is full of shit.

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If I ran a business that lost £500k a month would you applaud me as being a good businessman?

Firstly, Gary Hoffman is not full of shit. I speak from personal, albeit dated experience.

However, on the generous assumption that you are not someone from SISU PR, let me try and explain the issue.

In order to obtain success in football one needs some quite hefty investment. Even then it is not guaranteed. However SISU could achieve their goal of making money out of the club if we were to stay in the Premiership. Their return would also improve if they had income streams from the ground.

When they forceably took all shares without payment, they did so on the back of promising to make the investment necessary to make both of the above happen. Let's again be generous and assume that at the time they did intend to do that. However their takeover coincided with the start of the recession and as a result their other investments dropped in value.

As a result they have never made the lump sum investments needed. Whenever there has been a possibility of selling on players to realise a fast profit they have done so. As a result, the team has never reached the quality to acheive promotion. And because they did not buy the ground (and support is low because the team is poor) they run an operating loss.

So you may well laud them for keeping the team afloat, but theirs is a poor strategy and their lack of investment directly causes the operating loss. They seem to prefer to drip feed money into the club in the vain hope that a miracle will happen. Hoffman and Ranson realised this was a terrible business plan and indeed Hoffman's approach is to make that lump sum investment that is needed. Yes, he is a fan and a Coventrian, however his business model is sound: invest enough to reach an operating profit.

And also remember that SISU has not given the club anything. It has simply lent money. I don't know for sure, but I expect that these loans attract a generous interest rate and that is also part of the problem causing an operating loss.

But the reason that I dislike SISU so much is the disingenuity that is portrayed when communicating with the fans. Orange Ken and his mates seem to think that all City fans are ignorant of finance and business. So they make glib comments like "you wouldn't sell your house for a pound" which he knows are not a true and fair representation of the financial state of the club. Once can forgive the lack of investment as SISU may genuinely be experiencing cashflow problems and I'm sure they wish they never took the club from us. But I cannot forgive these pathetic attempts at deceit.

I've taken some time to explain this to you. If you do have any good points to make I'm more than happy to continue to debate with you at this kind of detailed and factual level.

Regards

Trench (Mr.)

This mess has degenerated into a battle personalties and frankly that benefits no one and in fact makes it all worse. Calling Hoffman or Dulieu, SISU or others names gets no one any further forward.

The premise that any one running the club will have to be prepared to fund losses is absolutely correct, credit should be given to SISU for that and/or any potential investor willing to take that on. Doesnt mean that their decisions cannot be questioned or challenged.

Yes every club needs investment - but I am curious why so many fans believe that throwing money at the club actually improves things. Unless that "investment" is in the form of shares issued and purchased then every £1 "invested" actually increases the debts and unless the club is profitable makes the total liabilities worse. Gambling on a return to the premiership is a high risk strategy that is not guaranteed to succeed - in fact statistics would say it was more likely to fail.

Yes the club income stream would improve owning the whole ground (it doesnt owning 50%) but to get that involves significantly increasing the debt of the club. If an investor puts in money it increases the liabilities whether that money is used for players or ground purchase

People harp back to the shares taken by SISU - bottom line December 2007 those shares had no value and had the deal not been done would most likely have been cancelled under any deal in administration. What happened then is no justification for folk insisting that SISU accept a similar deal - they dont have to and the two events are actually unconnected except by name on the current share certificates. Its a non arguement in any deal no matter how rankled any former shareholders are by the deal in 2007. Its history. I doubt SISU are argueing the value of the shares - they are entirely seperate to the loans made - the loans are the real issue

Yes SISU got hit by the recession. But as RR detailed early in 2008 the situation they took over was actually worse than thought and money for the transfer pot got used for other purposes. They had to deal with years of mismanagement that had accumulated £60m debts, a poor financial record and no real assets- it wasnt going to change quickly or easily. Couple that with the fact that despite the likes of Dann Fox Eastwood etc results did not improve on the pitch and crowds fell, then the situation is somewhat more complicated than SISU not spending on the team. Blackpool didnt spend much at all 2 seasons ago look what happened to them Cardiff spent millions .......

SISU have frustratingly sold our better players - all clubs sell players - but the money has not gone into the SISU pot it has been used to finance the club and buy other players (roughly £7.5m sold and purchased). The alternative is administration. Look at what SISU have presided over during the near 4 years ............ cant think of any great success and the club on a consistent down - would anyone throw money good money after bad. SISU get critcised for being business like - well its time fans woke up this is a multi million £ business and the reason much of football is in a mess is because of the amateur way it has been run. Football is not a special case it can not stand outside the normal rules of commerce - for years it and CCFC have tried to and look at the consistent place we have ended up in.

Got to agree the strategy is wrong have said so from the start, I personally also agree that the team investment is wrong they dont have to throw money at it but some investment is important. However not everything SISU have done is wrong. A small investment this season could have made such a difference to the club and fans. The biggest issue however for decades at this club has been that we pay out more in wages (primarily on an under achieving players!) than we actually earn. Doesnt matter if it is at the Ricoh or Highfield Rd it has always been so and that more than anything threatens our club. Get more players in (pay more wages)and that will increase crowds and solve the situation reduce the need to fund the club is the claim. Years of history before SISU say different it only works on a consistent improvement to annual average crowds - any one willing to bet on that?. The costs of the club have to be brought under control (either by SISU or any new investor) that means pain and frustration for the fans for a while but the long term future of the club is far more important. SISU have grasped that part of the nettle and to be honest I cannot find good reasons not to deal with it

We dont actually know GH's business plan - and he cant be certain of it himself until he owns the club and the structure of the deal is agreed - so we can not say if it is better or worse. He will have the same choices as SISU and may well have to make the same decisions. There is no doubt of his passion for CCFC anything else is speculation

SISU do not charge any interest on the debt owed to their investment funds. Therfore there is no current cost to those loans and no contribution to the losses. It may not be the same with any new investor - we dont know. Very likely SISU have foregone £1m+ per year in interest to the benefit of our club. Their choice, and i am sure many other clubs get the same from "investors". The debt at 31/05/10 was £24m it has increased since apparently

Most fans are not bothered about the finances and even fewer understand the figures. Why should they be, all they want is success on the pitch with a team in safe hands. Add to that the fact that everyone sees reads understands things their own way and we get the mess we have. Both sides in this mess have been unprofessional, both sides have tried to use the press to their advantage. The truth in all this is somewhere in the middle. As they say the truth is out there - but it is different for each of us. I am not bothered by who said what who is lying who is not - it is what is done for the betterment of the club that is important (and there will be things SISU have done that contributed to that).

SISU its time to go you have lost the trust of the fans ........... but as yet I remain very open minded as to whether GH or anyone else is the knight in shining armour that significantly changes our club for the better, have seen nothing so far to say that will be the case.

Just my opinion
PUSB

Go away dickhead.:jerkit:

Mindless abuse, that's the spirit.

Are they funding the club or merely putting more debt up against the club while mortgaging just about everything we have?

Malfie Henpox said:

I'm phoenix. Perhaps someone could tell me why they are so bad?

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Please tell me your joking.How can anyone who loves this club say something like this, just look at the complete mess we are in, who the hell do you think got us into it !!

The Rev

SkyBlueScottie said:

Are they funding the club or merely putting more debt up against the club while mortgaging just about everything we have?

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Simple answer to all that is yes SBS. Anything SISU put into the club to fund it is a loan so the debts increase and yes they have raised other loans by securing finance against any assets left

Malfie Henpox said:

I'm phoenix. Perhaps someone could tell me why they are so bad?

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They have taken out loans on future ticket sales for god sake !

Wake up

SISU OUT !

oldskyblue58 said:

Simple answer to all that is yes SBS. Anything SISU put into the club to fund it is a loan so the debts increase and yes they have raised other loans by securing finance against any assets left

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I know that, you know that, my 8 year old lad knows that. Bob my aunties live in lover knows that. I wonder if Malfie Henpox knows that?

SkyBlueScottie said:

I know that, you know that, my 8 year old lad knows that. Bob my aunties live in lover knows that. I wonder if Malfie Henpox knows that?

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I doubt Malfie Henpox knows that, as he seems to know sweet FA!

Thanks oldSyyBlue & Mr Trench for their posts.

The way forward for City is a profitable academy (that needs Gregor Rioch to stay), lower salaries, good scouting (Chris Hussey & Gary Deegan being great examples) & improved turnover.

Seems like SISU want to stop the club haemorraging losses, that is hard as practically every club does it, alternatively they want to get out without taking a financial hit. I don't think they will opt for cutting their losses if they see a way to achieve either of those aims. They presumably factor in 'growth' in their calculations to avoid losses (otherwise you might as wall put the money in the bank as invest in the SISU hedge fund).

I think Hoffnam wants to buy the club at no cost & let SISU take a hit, well it would be my starting point for negotiations if I were trying to buy, a clean slate & see if I can sort it out any better.

Don't expect a result soon, my feeling is that negotiations will drag on all season.

I am with OldSkyBlue58 on this.

SISU didn't "get us into this mess". The club was dissolving into chaos under McGinnity etc, and the sale of Highfield Rd and lack of ownership of the Ricoh mean that there is no financial underpinning to anything that the club do. SISU came in and kept an ailing business running, and just like everyone who has lost their jobs or had their wages cut since the start of the recession, they have been caught out by world events.

At least they have the long term future of the club at heart when considering a sale.

Hoffman might be respected, but everything I have read suggests that in terms of CCFC he is a bit of a chancer, and cannot provide either the right deal or the proof of finance to take over.

Now I could be wrong here, but if I were SISU, I would be biting the hand off of anyone who would stop a net outflow of funds from my business by taking it off my hands - so someone must have the sums wrong. Why does everyone assume it's SISU.

So, whilst I am not happy at lack of new players etc, it is a business and survival must be priority number one, progression comes second.

I didn't join in the SISU out chants yesterday because I don't see a realistic alternative. Let's face it selling to Hoffman means the transfer of ownership from one faceless consortium to a consortium with someone we have heard of fronting it, but with no real control over the money.

I am for strong and sustainable ownership. Up until we get that SISU are the best we will do.

JGazebo said:

I am with OldSkyBlue58 on this.

Now I could be wrong here, but if I were SISU, I would be biting the hand off of anyone who would stop a net outflow of funds from my business by taking it off my hands - so someone must have the sums wrong. Why does everyone assume it's SISU.

I didn't join in the SISU out chants yesterday because I don't see a realistic alternative. Let's face it selling to Hoffman means the transfer of ownership from one faceless consortium to a consortium with someone we have heard of fronting it, but with no real control over the money.

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The reason we assume its Sisu is because over the past 3 years they've proven themselves to be crap businessmen. Hoffman on the other hand doesn't need to prove anything when it comes to business.

I don't know if Hoffman would be any better, but he can't be any worse can he? Also the only people with enough money to sort of CCFC would be a consortium, one person wouldn't have enough. Therefore whoever tries to buy the club consortium, are you suggesting because of this we stick with Sisu forever more?

Malfie Henpox said:

CCFC are skint. New owners won't alter that. If SISU are losing £250k plus a month, they should be applauded for keeping the club afloat, not pilloried.

You are asking someone to come in and give their money away. It's irrational.

Also, it's quite clear Hoffman is full of shit.

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No its not Hoffman, its you who are full of sh*t.

Malfie Henpox said:

Would you offer to throw your own money at the club? I wouldn't. I don't care who runs the club. It doesn't matter.

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I think we can all draw our own conclusions about the type of person who would make such statements. Clearly this is not someone who is a life long fan of CCFC.

It doesn't matter to me who are in charge either as long as they invest in the playing squad and secure the long term future of the club.

Thanks OldSkyBlue.

Malfie Henpox said:

If you ran a company losing £500k a month and managed to keep it in business, only a fool wouldn't applaud you.

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It's clear that you just won't open your eyes to the fact that Sisu are killing our club.

Malfie Henpox said:

Some have very short memories here. SISU saved a club on the brink of destruction. The stole nothing.

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They postponed Admin, the club would most likey have survived.

Sorry but justifying the current situation by saying the saved the club does not wash. They took a calculated business decision from which they expected to profit from. There was no esoteric noble desire to see CCFC continue. Frankly i do not see why they didnt buy it out of administration in the first place it would have left more of their funds to invest in the team - that has always bothered me and I still cant come up with a convincing answer. Them saving us does not explain or justify the near four years since of mediocrity, PR cock ups, and near financial melt down. Its history we need to deal with the present

Would the club have survived as it is without SISU - no there no other options in terms of finance at the time. We would have gone into administration and League 1. That was an option they chose not to take (either Robinson & co or SISU) perhaps that with hind sight might have been the biggest mistake

Mr Trench and OSB are perfectly correct in the majority of what they say and applaud them for taking the time to explain these often complicated matters so we can all have a better understanding before jumping in with silly remarks as so many callers did yesterday on the radio.

To the layman it must be very difficult to understand and I include myself in that.

Both Hoffman and Delieu were putting there cases on the radio yesterday questioned by rather inept presenters but all the same you could garnish some of what had been going on in those meetings.

Now we will see just what kind of 'offer' Hoffman puts on the table early this week and see if it has enough substance to appease the current incumbents....

Quite whether we will be better off IF Hoffman succeeds is anther matter. He clearly thinks so. I suspect that is based on what he is asking SISU to accept and there is your stumbling block.

In order to understand this impasse we need to know exactly how the 'debt' is held.
Ranson often described CCFC as being debt free now (as the debt was now held by SISU) but I myself would like to ask where is this information coming from about the 'loans' and that the figure of debt is now 26m or so?
How much of this debt can be written down?

From what I can tell we are losing money as a club but the debt belongs to another company (SISU) and as such they will not walk away from that initial investment and the further funding they have given the club (interest free) without some or all of it being repaid.

My view is that Hoffman is making offers which requires some of that debt to be written off by SISU and the remaining figure paid up partially now and some deferred. It's a big ask. That would mean Hoffman's investment team have enough to fund the team immediately and buy the 50% of ACL shares in the stadium. Rather like asking SISU to help them buy the stadium using SISU's money!

What SISU may need to realise is that the small amounts of money they feed the club now is not enough to break from the lull we are in.
Is it better for them to take a hit or keep risking further funding in the hope of a miracle turn around? OSB is right - it won't happen historically I'm afraid.

I just fear though that once Hoffman gets in the funding will be limited and the debt will now accrue quickly on CCFC and within a year or two we may find ourselves more like candidates for admin than is ever likely today under the current way the club is structured and there by near secure from admin at least.

Lesser of two evils?

Just a foot note to all this:
I also suspect Hoffman is bidding now so as to be in a good position to reap the benefits of the Olympic year (provided he gets his ACL share)

Malfie Henpox said:

I'm not justifying anything. Quite the opposite in fact. I don't think a takeover is justified. Because the club will be earning no money whomever comes in. People seem to want someone to come in and throw money at the club. It won't happen. And even if it did, it would only postpone the problem. Coventry are not a big club. The stadium is too big, unowned and mostly empty. They need to live within their revenue stream, or cease to exist.

It doesn't matter who currently owns the club. They will have to operate within the same budget. That means building a team for less than money than they spend. Average attendance has always been around 14,000. Even in the Premier League. The squad wages need to be less than whatever that generates. Speculate to accumulate doesn't wash here. It needs to be a life long commitment to live within means. If that means League 1 football, so be it. Asking for more investment is like debt ridden people taking out one of those consolidation loans. Borrowing more when you're losing money makes no sense.

The sooner people 'open their eyes' and accept that Coventry are going to be poor for a few years yet, the better.

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New owners won't be operating within the same budget though as they will have income from the stadium, and investment in the team should increase attendences. It is financial mis management from Sisu and the previous owners that is the problem, nothing to do with too big a stadium.

You say Coventry aren't a big club, we are certainly a big enough club to be able to compete in the top half of the championship.

The average attendence hasn't been as low as 14k since HR days, and was only as low as that in the prem years at the very start, mid to late 90's it was always nearer 20k.

I think Mr Hoffman might be wearing Sky Blue spectascles when he is involved in this business, Ransom's method to get the club on a secure financial footing were the right approach, but of course it takes time, money, and its not guaranteed.

SISU don't care - to them its just a business
~ money.

If you're Phoenix then welcome back ~ I thought you got stabbed in Manchester ?

Malfie Henpox said:

I'm not justifying anything. Quite the opposite in fact. I don't think a takeover is justified. Because the club will be earning no money whomever comes in. People seem to want someone to come in and throw money at the club. It won't happen. And even if it did, it would only postpone the problem. Coventry are not a big club. The stadium is too big, unowned and mostly empty. They need to live within their revenue stream, or cease to exist.

It doesn't matter who currently owns the club. They will have to operate within the same budget. That means building a team for less money than they earn. Average attendance has always been around 14,000. Even in the Premier League. The squad wages need to be less than whatever that generates. Speculate to accumulate doesn't wash here. It needs to be a life long commitment to live within means. If that results in League 1 football, so be it. Asking for more investment is like debt ridden people taking out one of those consolidation loans. Borrowing more when you're losing money makes no sense.

The sooner people 'open their eyes' and accept that Coventry are going to be poor for a few years yet, the better.

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Chap the whole purpose of the SISU deal was to invest for a short to medium term then sell it on - its how they make their money for clients. Of course a takeover is relevant its what they do

If you were not seeking to justify SISU's position why bring up their original takeover at all, it has no relevance to now other than they are here. I never said it was a justification of a new takeover - but you sought to imply we should be eternally grateful for their original involvement - not sure I am and even if i was i am certainly not forever grateful. They have had nearly 4 years to sort this out, the basic problems have never changed. I am not interested in the history - what is being done now is what is important

Last thing I want is for money to be thrown at the club in the vain hope some of it sticks bringing success. Suggest you read some of my previous posts because I believe a sustainable small investment coupled good cost control and some player sales is the way forward. Basically a hybrid between what RR wanted and what SISU are doing. Those posts will also tell you that I wholeheartedly believe in the club living within its means. That however does not necessarily preclude investment in the squad

Before you go quoting statistics at least check them out - our crowd average has never been 14K in the championship at the Ricoh. The crowds are only part of the solution, player sales another, success on the pitch another and off pitch income streams another. If there was someone willing to bankroll investment then thats a possible other source so long as it is sustainable from a salary point of view. Think you need to widen your thinking.

Also the size of the stadium is important - it is what allows the various income streams currently going to ACL, it is also what gives potential for crowd growth or the big match paydays. That is the reason SISU and others want to own it. it isnt too big its under utilised

Of course it matters who owns the club - it matters to all proper fans because if they trust the ownership they part with their money easier. There are all sorts of alternatives and structures. The club will have no choice but to live within its means - the football league will demand it, but couple that with academy player development and player sales then the picture isnt necessarily so gloomy as you paint.

As for the budget well that can vary depending on what the owners prioritise or the success of the team. All budgets are not the same. It isnt just the squad wages in the budget, in 2010 the club had 90 employees they were not all players

I dont think what SISU has done has been all bad, there have good things and the cost cutting is painful but appropriate. However your blythe acceptance of our lot puzzles me and makes me wonder what passion you actually have for CCFC because it doesnt come over in your posts at all chap. Yes be realistic in our understanding but never to hope for better ?

speculate to accumulate doesnt always work agreed but the purchase of a Dann or a Fox would make a difference wouldnt it....... or better still develop the academy sign a Gael, a Conor, a Cyrus and increase their value and sell on

Am very aware of the CCFC financial predicament, very realistic in my assessment doesnt mean I am accepting of all that is thrown at me. SISU have lost the trust of their primary income source chap and this is the greatest piece of realism here because it will be almost impossible to rebuild - that affects all aspects of their involvement in the club. That above all is why SISU need to find an acceptable deal and move on