Why ACL's rent calculation could be justified. (1 Viewer)

SkyBlueCharlie · Dec 10, 2012

As far as I am aware it there has been no independent confirmation that the 'average' ground rent in League 1 quoted by CCFC/SISU is £150k per annum but there seems to general acceptance that is is correct (if only because no-one has appeared to refute it).

It has also been widely reported that ACL have calculated their 'fair' rent as being around £400K per annum, so can we make a judgement call on their assessment?

Generally when buying or renting commercial property the price is based on a rate per square foot (or square metre to the youngsters on here) but as all football pitches are roughly the same size I think in this case a better metric would be ground capacity, after all the larger the capacity the greater potential income. So using the Football League database it is possible to calculate the average gound capacity in League 1 as being 13192 (23 clubs). CCFC's capacity is 32609, ie roughly 2.5 times the average so logic should dictate that CCFC's rent should be 2.5 times the League average, ergo £375K per annum.

So it would appear that ACL's offer of £400K is about correct.

Discuss in less than 500 words!

SkyBlueScottie · Dec 10, 2012

If only it was that simple.....

Wrenstreetcarpark · Dec 10, 2012

SkyBlueCharlie said:
As far as I am aware it there has been no independent confirmation that the 'average' ground rent in League 1 quoted by CCFC/SISU is £150k per annum but there seems to general acceptance that is is correct (if only because no-one has appeared to refute it).

It has also been widely reported that ACL have calculated their 'fair' rent as being around £400K per annum, so can we make a judgement call on their assessment?

Generally when buying or renting commercial property the price is based on a rate per square foot (or square metre to the youngsters on here) but as all football pitches are roughly the same size I think in this case a better metric would be ground capacity, after all the larger the capacity the greater potential income. So using the Football League database it is possible to calculate the average gound capacity in League 1 as being 13192 (23 clubs). CCFC's capacity is 32609, ie roughly 2.5 times the average so logic should dictate that CCFC's rent should be 2.5 times the League average, ergo £375K per annum.

So it would appear that ACL's offer of £400K is about correct.

Discuss in less than 500 words!

add to that the retail space of the shop, the office space for Club and Football in the Community, storage, groundsman's store and office.
There is then a judgement on the kind of space being rented: just dimensions will not do. Wharehouse v whorehouse. Sophisticated design and construction of pitch with modern heating and sprinkler system, electronic scoreboard etc. Number of seats and crucially number that can be sold for corporate hospitality at a premium price.

so perhaps £400k is on the light side.

shmmeee · Dec 10, 2012

I think some of you are misunderstanding City's point. It isn't that the Ricoh isn't worth the money. It's that we can't afford the Ricoh as is.

The question to ACL is: do you want less money from football or none at all as from CCFCs side this isn't sustainable.

stupot07 · Dec 10, 2012

But you would then have to factor in to the equation what the championship and PL pay, wasn't it quoted that championship average is about £280k? And there's a good mixture of new and large grounds in the championship.

Mucca Mad Boys · Dec 10, 2012

Does anyone know how much rent Swansea pay? I kow the Swansea Council demanded they pay more rent. :thinking about:

SkyBlueCharlie · Dec 10, 2012

stupot07 said:
But you would then have to factor in to the equation what the championship and PL pay, wasn't it quoted that championship average is about £280k? And there's a good mixture of new and large grounds in the championship.

Haven't done all of the calculations for the other divisions but at first glance it would appear that using the same analysis technique then the sliding scale indicated by ACL would also be valid. When you get to the Premiership however it would all becomes insignificant compared to the additional income from television etc.

SkyBlueCharlie · Dec 10, 2012

SkyBlue_Taylor said:
Does anyone know how much rent Swansea pay? I kow the Swansea Council demanded they pay more rent. :thinking about:

According to their local press it's a 'peppercorn' rent and the reason the Council are asking for more is they have been losing money supporting the club getting into the Premiership and now the club have increased income they want some return. The club however, is pleading poverty even with the extra income generated by getting into the Prem, Sound familiar?

Bennets Afro · Dec 10, 2012

How many teams from each league pay rent on their stadium and how many own their own ground.

For example if only 5 other teams in league one pay rent, and they were the 5 worse grounds in what they offer and capacity, would this £170k average be a distorted figure???

ccfcway · Dec 10, 2012

How much do cardiff City pay to play in an identical stadium to the ricoh ?

Mucca Mad Boys · Dec 10, 2012

SkyBlueCharlie said:
According to their local press it's a 'peppercorn' rent and the reason the Council are asking for more is they have been losing money supporting the club getting into the Premiership and now the club have increased income they want some return. The club however, is pleading poverty even with the extra income generated by getting into the Prem, Sound familiar?

We sure don't pay peppercorn rent!

Swansea tbf, have to spend to stay up now they're in the prem.

SkyBlueCharlie · Dec 10, 2012

Bennets Afro said:
How many teams from each league pay rent on their stadium and how many own their own ground.

For example if only 5 other teams in league one pay rent, and they were the 5 worse grounds in what they offer and capacity, would this £170k average be a distorted figure???

That's the $100 question and as far as I can see no-one knows. many(?) clubs own their grounds but presumably have them mortgaged and it could possible to say that the mortgage payment equates to 'rent'. The issue is as far as I can see that in most cases it is impossible to get that information even if you spend a lot of time analysing club accounts and I have looked. SO where did CCFC get their figure from? As I said in my original post there has been no independent confirmation of their rent figure...pie in the sky or just a figure plucked out of the air to justify their negotiating position? You choose!

wingy · Dec 10, 2012

shmmeee said:
I think some of you are misunderstanding City's point. It isn't that the Ricoh isn't worth the money. It's that we can't afford the Ricoh as is.

The question to ACL is: do you want less money from football or none at all as from CCFCs side this isn't sustainable.

Sad as that scenario may be shmmeee,it may get to the point where as helpful as that be to the club,if it costs ACL more than they can achieve through other ventures ,their sustainability has to be protected also,when you go through our squad the loss of a couple of perifery players are enough to bridge thegap.

Mucca Mad Boys · Dec 10, 2012

wingy said:
Sad as that scenario may be shmmeee,it may get to the point where as helpful as that be to the club,if it costs ACL more than they can achieve through other ventures ,their sustainability has to be protected also,when you go through our squad the loss of a couple of perifery players are enough to bridge thegap.

But teams aren't exactly queuing for our shite players...

Wrenstreetcarpark · Dec 10, 2012

shmmeee said:
I think some of you are misunderstanding City's point. It isn't that the Ricoh isn't worth the money. It's that we can't afford the Ricoh as is.

The question to ACL is: do you want less money from football or none at all as from CCFCs side this isn't sustainable.

We have the largest squad. We pay more than any other League 1 club in player wages, around £5m. CCFC chooses not to pay rent but rather to pay players. Other club's pay rent, rates AND players. Fisher/Sisu would say they are fools because all that matters is what happens on the pitch and it doesn't matter who else you screw: and as can be seen here a lot of posters think that is just what Fisher/Sisu should be doing. That they are also scum, some of them racists, probably wife beaters etc doesn't stop them all being part of the Sky Blue Army. There are Fishers and Sisus everywhere.

stupot07 · Dec 10, 2012

Wrenstreetcarpark said:
We have the largest squad. We pay more than any other League 1 club in player wages, around £5m. CCFC chooses not to pay rent but rather to pay players. Other club's pay rent, rates AND players. Fisher/Sisu would say they are fools because all that matters is what happens on the pitch and it doesn't matter who else you screw: and as can be seen here a lot of posters think that is just what Fisher/Sisu should be doing. That they are also scum, some of them racists, probably wife beaters etc doesn't stop them all being part of the Sky Blue Army. There are Fishers and Sisus everywhere.

No we don't, and our wage bill isn't £5m

Bluegloucester · Dec 10, 2012

stupot07 said:
No we don't, and our wage bill isn't £5m

If you add in win bonuses etc it is over £5m

Mucca Mad Boys · Dec 10, 2012

Wrenstreetcarpark said:
We have the largest squad. We pay more than any other League 1 club in player wages, around £5m. CCFC chooses not to pay rent but rather to pay players. Other club's pay rent, rates AND players. Fisher/Sisu would say they are fools because all that matters is what happens on the pitch and it doesn't matter who else you screw: and as can be seen here a lot of posters think that is just what Fisher/Sisu should be doing. That they are also scum, some of them racists, probably wife beaters etc doesn't stop them all being part of the Sky Blue Army. There are Fishers and Sisus everywhere.

Wow, there goes your credibility.

We have a right to negotiate the rent we pay.

coundonskyblue · Dec 10, 2012

SkyBlue_Taylor said:
Wow, there goes your credibility.
 
We have a right to negotiate the rent we pay.

No, we have a right to ask for a negotiation. Just like I have the right to put in a 20k bid for a Kenilworth road house.

If the seller says no there isn't much I can do about it.

What's Walsall's rent again? Can't be much less than the 400k acl offered.

stupot07 · Dec 10, 2012

Bluegloucester said:
If you add in win bonuses etc it is over £5m

I believe that the new bonus structure means that players only get bonuses if the team are in the top 6.

And I'm pretty sure player bonuses along with purchase costs are all included within the FFP rules, and that the £4.2m that has been quoted is the clubs entire player budget including all of these things and wages.

stupot07 · Dec 10, 2012

coundonskyblue said:


No, we have a right to ask for a negotiation. Just like I have the right to put in a 20k bid for a Kenilworth road house.

If the seller says no there isn't much I can do about it.

What's Walsall's rent again? Can't be much less than the 400k acl offered.

What % of matchday income do Walsall get?

Ipswich pay £100k for a similar capacity stadium.

coundonskyblue · Dec 10, 2012

stupot07 said:
What % of matchday income do Walsall get?
 
Ipswich pay £100k for a similar capacity stadium.

Don't know, but lets for arguments sake say 100%, we get crowds of 56% larger than them. So with acl's offer of 50% of income, we would still be better off than them.

wingy · Dec 10, 2012

Thommo just been on CWR giving a tribute to dave Sexton as his funeral was today.

He talked as though he had a line on things and made suggestions it will be resolved in the next 10 days.

Mucca Mad Boys · Dec 10, 2012

coundonskyblue said:


No, we have a right to ask for a negotiation. Just like I have the right to put in a 20k bid for a Kenilworth road house.

If the seller says no there isn't much I can do about it.

What's Walsall's rent again? Can't be much less than the 400k acl offered.

Well it's getting negotiated and we sure didn't ask for it (not in a polite way anyway!)

stupot07 · Dec 10, 2012

coundonskyblue said:


Don't know, but lets for arguments sake say 100%, we get crowds of 56% larger than them. So with acl's offer of 50% of income, we would still be better off than them.

And, bigger clubs are better off than smaller ones, this isn't the American system where everyone gets the same income.

Walsall are also being massively overcharged, and actually we don't know their lease agreement. They might rent the lot and can sublet for functions, events, etc. we just play football at the Ricoh, ACL can let it out for concerts, rugby, etc. we only have limited usage.

coundonskyblue · Dec 10, 2012

stupot07 said:
And, bigger clubs are better off than smaller ones, this isn't the American system where everyone gets the same income.
 
Walsall are also being massively overcharged, and actually we don't know their lease agreement. They might rent the lot and can sublet for functions, events, etc. we just play football at the Ricoh, ACL can let it out for concerts, rugby, etc. we only have limited usage.

But that goes against what fisher says though. He wants a rent 'just like any other league 1 club', but fact is we already have income in excess of most league 1 clubs.

stupot07 · Dec 10, 2012

coundonskyblue said:


But that goes against what fisher says though. He wants a rent 'just like any other league 1 club', but fact is we already have income in excess of most league 1 clubs.

Not really, we are a league one club and should pay rent with is in line with league one rent, what has been offered is still £120k more than the average championship rent let alone league one.

oldskyblue58 · Dec 10, 2012

stupot07 said:
I believe that the new bonus structure means that players only get bonuses if the team are in the top 6.

And I'm pretty sure player bonuses along with purchase costs are all included within the FFP rules, and that the £4.2m that has been quoted is the clubs entire player budget including all of these things and wages.

Got to be careful with the FFP calculation .... there are a lot of things included but also some things that are not eg homegrown under 21, ...... the base figure is distorted by net player transfers also ....... so in theory you could have a situation that actually sees you spend more than 65% of Turnover quite legitimately in the eyes of the league.

Is it any wonder the clubs are not transparent when the league isnt very in the first place ! :facepalm:

stupot07 · Dec 10, 2012

oldskyblue58 said:
Got to be careful with the FFP calculation .... there are a lot of things included but also some things that are not eg homegrown under 21, ...... the base figure is distorted by net player transfers also ....... so in theory you could have a situation that actually sees you spend more than 65% of Turnover quite legitimately in the eyes of the league.

Is it any wonder the clubs are not transparent when the league isnt very in the first place ! :facepalm:

I know it's very complicated, that's why Swindon had a transfer embargo when the compensation payments for Collins and another player by a tribunal.

coundonskyblue · Dec 10, 2012

stupot07 said:
Not really, we are a league one club and should pay rent with is in line with league one rent, what has been offered is still £120k more than the average championship rent let alone league one.

Well seen as Fisher is the only source of info for what an average league 1 rent is, I would be very suspicious of those figures. However I'm willing to believe him, but I would like to know why ours shouldn't be an above average league 1 rent? No 2 clubs will pay the same, someone has to pay the most, so why shouldn't it be CCFC?

Jim · Dec 10, 2012

stupot07 said:
Not really, we are a league one club and should pay rent with is in line with league one rent, what has been offered is still £120k more than the average championship rent let alone league one.

No we should pay for the facility that we currently use. And that is a top notch stadium far in excess of other league one stadia.

The offer of a reduction to £400k per annum would reduce our rent to less than 10% of total overheads. Hardly a crippling cost for what should one of the major outlays for any business.

Offer has been made. Club should have accepted. Simple.

stupot07 · Dec 10, 2012

coundonskyblue said:
Well seen as Fisher is the only source of info for what an average league 1 rent is, I would be very suspicious of those figures. However I'm willing to believe him, but I would like to know why ours shouldn't be an above average league 1 rent? No 2 clubs will pay the same, someone has to pay the most, so why shouldn't it be CCFC?

I agree it should be above league one average but below championship average £250k seems like a nice number!

Why should ccfc pay the most? Yes we have the biggest capacity but we don't get the biggest crowds, and which other grounds get used for other things such as concerts, rugby, etc to being in alternative income out of season or the owners?

stupot07 · Dec 10, 2012

Jim said:
No we should pay for the facility that we currently use. And that is a top notch stadium far in excess of other league one stadia.

The offer of a reduction to £400k per annum would reduce our rent to less than 10% of total overheads. Hardly a crippling cost for what should one of the major outlays for any business.

Offer has been made. Club should have accepted. Simple.

That's why I've included the championship comparison, forget about the casino, the jaguar hall, the concerts, etc. we only use the 100x50m bit of grass and accompanying seats. The average is £280k in the championship if anything our rent should be somewhere between that and the league one.

coundonskyblue · Dec 10, 2012

stupot07 said:
I agree it should be above league one average but below championship average £250k seems like a nice number!

Why should ccfc pay the most? Yes we have the biggest capacity but we don't get the biggest crowds, and which other grounds get used for other things such as concerts, rugby, etc to being in alternative income out of season or the owners?

Most other grounds are complete dives that don't even have major corporate areas. We have the 3rd biggest crowds, and the second biggest stadium.

The only grounds that come close to the Ricoh in terms of facilities and income potential (ie concerts, other sports), are Bramall Lane, Stadium MK, and at a push Deepdale.

stupot07 · Dec 10, 2012

coundonskyblue said:
Most other grounds are complete dives that don't even have major corporate areas. We have the 3rd biggest crowds, and the second biggest stadium.

The only grounds that come close to the Ricoh in terms of facilities and income potential (ie concerts, other sports), are Bramall Lane, Stadium MK, and at a push Deepdale.

Yep, so like I said our rent should be somewhere between the league one and championship average rent.

Why ACL's rent calculation could be justified. (1 Viewer)

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