£6m a year I think when they arrived. Now allegedly close to break even but that seems to involve selling a player every year.
Depends if you're looking at it from a business perspective or a fan perspective. If SISU want us to break even they won't care if we have to sell someone just that the numbers add up at the end of the year. From our point of view we would want to be breaking even without the need to sell anyone.So, if we need to sell a player to break even, we are not break even?
That was EBIT (before interest and tax), that won't translate to £1m 'spare' at the end of the year. Even if it did that wouldn't necessarily mean there is £1m to spend as you would have to take into account cashflow.What happened to £1mill profit according to TF?
Depends if you're looking at it from a business perspective or a fan perspective. If SISU want us to break even they won't care if we have to sell someone just that the numbers add up at the end of the year. From our point of view we would want to be breaking even without the need to sell anyone.
That was EBIT (before interest and tax), that won't translate to £1m 'spare' at the end of the year. Even if it did that wouldn't necessarily mean there is £1m to spend as you would have to take into account cashflow.
MOVE TO THE RICOH
"The Club had high hopes on and off the pitch for the move to the new stadium. In financial terms, the Club budgeted broadly in-line with the experience of other clubs moving into a new stadium, to increase its revenue by 50%. This meant that despite the loss of profits from sponsorship, board advertising and catering, the Club would nonetheless have sufficient increase in income from the major sources of revenue with which it was left - season ticket and matchday sales, merchandise and boxes - to generate for the first time in many years an operating profit and positive cash flow. £1m was due to come into the Club.
Sadly, as is now public, these hopeful plans were dashed by two factors. 1) the late opening of the stadium, and 2) our own inadequate preparations to exploit the opportunities afforded by the new stadium. The Club's estimate of the cost to it commercially from the late opening amounted to over £1m. The factors were the loss of a high profile opening friendly; the loss of our opening home fixtures particularly Norwich which would have been our first League fixture; and the loss of merchandising sales which had not been planned around a major drive to take place in the new premises.
There was one other factor that cost us dear, namely the unscheduled changes to Coventry City Council's Section 106 agreement in respect of potential parking areas. This more less doubled the size of the no parking zone and the impact on our season ticket sales was heavily adverse. We were 50% below our budget. Discussions on improving the situation continue with the Council.
However, this is not the whole story. Our own preparations were not professional or thorough enough. Had the Ricoh been ready on time we would have certainly done much better and we would have avoided the short term cash crisis that hit us. But when we look around at other similar clubs, they are better organised and obtain much higher revenues from those activities that are still with the Club.
THE CASH CRISIS
In any event, the outcome, due to this combination of factors, was that by September last year, the Club had suffered a serious cash outflow of £1m in the preceeding months and was in breach of its overdraft limit. After a difficult but constructive negotiation we have reached agreement with the Co-operative Bank to enable the club to trade with confidence for the future. I would like to thank the Co-operative Bank for their support. We have also reached agreement with Arena Coventry Limited who operate the stadium, for compensation amounting to £280,000 due to the late opening of the stadium. Whilst, this is much less than the Club considered it could have legitimately claimed, we recognise that ACL itself has suffered considerable financial losses. Further discussions continue with ACL to agree a two tier rental agreement whereby the Club pays rent of £500k in the Championship and £1.5m in the Premiership. We hope to make an announcement in the near future."
£6m a year I think when they arrived. Now allegedly close to break even but that seems to involve selling a player every year.
I wonder if, say we did get "decent" gates for this league of 15K or more, would there be a need to sell - maybe we could acutally add and improve rather than rob peter to pay paul.
IMO £15m they'd rip your hand off, £10m would be given serious consideration.Chief Dave, in your opinion how much do you think SISU would sell for?
Funny really. Losses increased from 05 to 06 despite a 25% increase in gates. Just shows what a complete disaster the Ricoh is.SISU came in December 2007. Losses to May 2004 were £8.2m, May 2005 was 0.9m, May 2006 was 3.3m and May 2007 was 4.3m according to this:
Coventry City Football Club Ltd | The Political Economy of Football
The accounts to 31st May 2005 have some interesting comments in them from Paul Fletcher
In terms of where it was paid from some of it never really existed in a sense. There was debt from pre-SISU years that stayed on the books but SISU didn't pay out on it (if that makes sense). From what OSB has said the original investments from the SISU funds is likely to have been written down by now, no doubt hidden to their investors as its bundled in with other investments.Any idea about the equity shares , will anybody be expecting a return on them or is it literally wiped off debt
In a word no.Another question Chief Dave; If sisu did sell, has anyone ever produced a viable strategy that they could put to the new owners, which would enable the club to be owned by the supporters? Has it ever been properly discussed and planned?
Or was it the club completely overpaid on wages??? If your getting a 25% increase in gates you must be losing the money somewhere else.Funny really. Losses increased from 05 to 06 despite a 25% increase in gates. Just shows what a complete disaster the Ricoh is.
The thing is if we were fan owned unless we had some hella rich fans it wouldn't be the dream everyone thinks it is.Thanks for the info Chief Dave I see what you mean. But if there was a take over in which the supporters were initially subsidized and didn't have to pay back for a number of years, say 10, 15 years, and there was a reasonable amount invested on the team, could someone here come up with a viable proposal/outline in which to produce to an investor (which an investor could look at it and be interested)? Could you foresee CCFC being self sufficient like Bayern Munchen or FC Wimbledon?
It's a very good question Evo, the answer to which I have no idea, but would love to hear opinions from people more knowledgeable than me. (Dongonzales, Otis, Grendel, Northernwisdom, Nick). I know these types of questions turn into arguments, but if people could just post the figures with a short summary it would be gratefully appreciated.
Thanks Dongonzalos. So leaving sisu out of it for a moment. If the club was bought for $15m, there would still be $20/30m debt to pay also?
No. My understanding is that the club itself is pretty worthless at the moment, so what you are actually paying for is for SISU to wipe the debt.Thanks Dongonzalos. So leaving sisu out of it for a moment. If the club was bought for $15m, there would still be $20/30m debt to pay also?
As you can see, I know nothing about these matters. But can I ask you another hypothetical question? (sorry) Could someone buy the club and its debt, put in a further $5-10m in the first season, a further $5-10m the next season or $15-20m if promoted to Championship, and $20m for the push for the EPL and expect return of interest of the investment over the next 15-20 years. How would that return come about if (again hypothetically) it were to succeed.
No. My understanding is that the club itself is pretty worthless at the moment, so what you are actually paying for is for SISU to wipe the debt.
Paying £1 for a club with £30m debt and keeping the debt, or
Paying £30million for a debt free club
...are the same in my eyes.
The £1.5 million they were robbing us of every year for rent and match day costs made a solid dent in that.Or was it the club completely overpaid on wages??? If your getting a 25% increase in gates you must be losing the money somewhere else.
As you can see, I know nothing about these matters. But can I ask you another hypothetical question? (sorry) Could someone buy the club and its debt, put in a further $5-10m in the first season, a further $5-10m the next season or $15-20m if promoted to Championship, and $20m for the push for the EPL and expect return of interest of the investment over the next 15-20 years. How would that return come about if (again hypothetically) it were to succeed.
OSB is the man
My guess from all the info here is that the club has about 35 million of actual debt.
I don't understand what it means about debt getting written off as shares. However somehow it apparently took our debt down from about 60 million to around 35 million. I can only assume as a share no return is guaranteed as oppose to an actual debt??
It is also suggested on here that SISU actually invested 20-30 million
Not invested the suggested 60 million.
I can't see how we can ever break even because if your only solution to breakeven is to cut costs and your main source of income is crowds one will always lead to a decrease in the other.
So I think Dave is right we will have to be lucky enough to have a 1 million pound player every year which we won't.
I can't see that ever happening unless there's drastic changes to the way football runs in this country. The likes of Wimbledon and Portsmouth have the same problem. Wimbledon only broke even in their last accounts as they got Liverpool in the cup and it was televised. Pompey have by far the biggest crowds in the division but can't get out of it.Thanks for the info Chief Dave I see what you mean. But if there was a take over in which the supporters were initially subsidized and didn't have to pay back for a number of years, say 10, 15 years, and there was a reasonable amount invested on the team, could someone here come up with a viable proposal/outline in which to produce to an investor (which an investor could look at it and be interested)? Could you foresee CCFC being self sufficient like Bayern Munchen or FC Wimbledon?
Exactly this. Investment implies some return down the line so when people say SISU should have invested last January to get promotion when would they get a return on that? Either we would have failed and its more money down the drain or we'd have gone up and even more investment would be needed the following season just to stay in the Championship let alone launch a promotion bid.All I ever hear are cries for "investment investment". Well, what does that actually mean? Spend a few million and reap your returns later on (get an ROI). Well when is the time to reap any returns? The problem is SISU tried that and royally fucked it up and their investment didn't work. They didn't spend it wisely...mostly because they know fuck all about football and appointed idiots to make their decisions for them. But also, because there are 20 odd other clubs in a league trying to do the same bloody thing and only 3 places to fight for to get promoted.
Thanks for your info dongonzalos, robbiekeane & chiefdave. If there are other ways the club could generate money, along with the sponsorship and TV money I would be interested to hear about it.
And how are you getting to the PL to get that money? Remember there's plenty of teams in the championship happy to chuck millions a season at a promotion push.Not sure why you would need any other ideas buddy. The tv money would be near 100 million. So as long as your wages were below that you would get your return.
Then you have sponsorship on top of that.
If your wages were 70 million you would have your return in one season.
A new owner could first rebuild the trust of the fans this in turn will bring fans flocking back, after all Sisu's plan of alienating everyone they deal with doesn't work.In a word no.
Its something I've mentioned many times, its all well and good saying SISU should walk on the assumption someone else will come in but other than a rehash of SISU's original plan (pump some money in and hope for promotion) what else could a new owner do?
I can't see how we can survive fan owned. Portsmouth have crowds of 15K, are a minority fan shareholding and can't get out of L2.
And how are you getting to the PL to get that money? Remember there's plenty of teams in the championship happy to chuck millions a season at a promotion push.
I don't think you can really rely on a true set of accounts for the football club in isolation. Yes, they will factually comply with companies house but you need to look at all the supplies (payments out) to other companies that individuals or interested parties provide.
The club accounts will be manipulated around their strategy. Simple example of this is the court case situation, judge said CCFC were loss making so had no rights on loss etc, suddenly, for the appeal, we are then trading equally and making a profit.
Companies like ARVO etc and the interest and management charges by the actual SISU fund are the real key questions that should be asked. What exactly are ARVO doing for that money.
The club could well make a profit every year and all we will see is increased supplies by other companies to take that profit out.
For me, the Portsmouth model is one that will never work for this club, or actually work for them, they still have a huge problem investing for the stadium repairs and trying to get a decent team together on a budget from revenues. We will never raise the capital as fans similar to them. They also had council support and an investor who owns the majority.
Don't focus on the accounts but focus questions to Fisher around the aspects of supply in the accounts.
Can you explain what you mean by supply in the accounts in more layman terms please?
Simple, a company charges for a service, so for example Fred Bloggs may be hired as a consultant to a company that contracts to CCFC and is paid by the company that has the contract with CCFC but not directly by CCFC. Fred may even receive little or no salary from that 3rd party company providing the service but have shares in the company and therefore receive a dividend from them as they are bound to be profitable with this lovely consultancy they are doing. The service is legitimate, the true value of the service may be debatable.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?