Selling Carrow Road?

[DOGGER 0]

[quote user="Bobzilla"]

There are only two problems with that - One, we are at the bottom of the market, and so we wouldn''t get a good price. And two, the club is then at the mercy of an outsider. This is a very very dangerous game, and you need a very very good lawyer to make this work - the contract has to be watertight. Plus you need an investor who wants to do the deal.

I wouldn''t recommend it in anything other than the most dire circumstances.

[/quote]

.............Which we seem to be in!!

[The Fish Seller 0]

Do we have £34.5m equity in the club specifically in the ground itself?? I don''t think so, certainly the £16m net value touted by the club when PC was in the spotlight would back me up.

[Sing Up The South Stand 0]

I guess the main problem would be, if we were to start doing well on the pitch again (I know we are but L1), reached top of the Championship and possibly the Premier League, and wanted to increase capacity, we would be unable to as we wouldn''t own it.  And would mean buying it back, and then building, unless the council/company decided to do it which I can''t see.

Also, wouldn''t all our income go down?  As where would the money from food and drink etc go, would we get it or would it be the company who owned CR?

[Jim Smith 2,314]

[quote user="Mark Rivers..."]

I guess the main problem would be, if we were to start doing well on the pitch again (I know we are but L1), reached top of the Championship and possibly the Premier League, and wanted to increase capacity, we would be unable to as we wouldn''t own it.  And would mean buying it back, and then building, unless the council/company decided to do it which I can''t see.

Also, wouldn''t all our income go down?  As where would the money from food and drink etc go, would we get it or would it be the company who owned CR?

[/quote]

 

I''m sure any lease would cover that and i''m sure we would be able to do it. The owner would hardly be likely to object to us increasing the capacity of the stadium as ultimately it would increase the value of the asset.

[Wembley_Canary 0]

[quote user="Mark Rivers..."]

I guess the main problem would be, if we were to start doing well on the pitch again (I know we are but L1), reached top of the Championship and possibly the Premier League, and wanted to increase capacity, we would be unable to as we wouldn''t own it.  And would mean buying it back, and then building, unless the council/company decided to do it which I can''t see.

Also, wouldn''t all our income go down?  As where would the money from food and drink etc go, would we get it or would it be the company who owned CR?

[/quote]

That''s one of the reasons i''m put off about this idea, our ground is too small for us at League 1 level let alone the Premiership, should we eventually get there.

Other than that it would just make me feel dirty, like were selling our sole to the devil or worse yet taking a leaf out of the binners book.

[tom cavendish 0]

[quote user="Mr.Carrow"]

It`s on the front page of the EDP, though i haven`t read it.  I assume that`s where the £34m figure came from?  That is alot of money and would pay back our debts with a fair bit to spare.

People panicking about it should bear two things in mind:  a., I`m sure no deal would be done unless there was a 100-year lease or "sporting activities only" arrangement and b., A £1m a year ground rent is still alot less than the £1.8m or so we pay in interest each year- and we wouldn`t have the spectre of upcoming repayments hanging over us as we did to the tune of £2.5m last season.

It`s an uncomfortable thought for sure, but just remember that a certain G.Watling having bailed the club out from Chase stated that the clubs main problem was that it was "asset-rich, but cash-poor" and unfortunately under the previous board that situation got much worse rather than better.

[/quote]

"sporting activities only" easily gets overturned by developers these days and besides ''other business'' such as restaurants, retail, and hotel is already established at the stadium.

[Yellow since 1977 0]

The company who owned the property would be more than keen to increase its revenue by increasing the size of the stadium, they would probably pay for the new stand and add it onto the annual lease payment, as long as the interest is competetive this would be a good, quick and releatively cheap way of increasing the ground capacity.

The club would still recieve all the income from normal day to day activities as they would be seen as a tenent.

[Yorkshire Canary 118]

No Council has spare money to do things like this any more. It would be the finace company and it would be the beginning of the end

[Jim Smith 2,314]

[quote user="tom cavendish"][quote user="Mr.Carrow"]

It`s on the front page of the EDP, though i haven`t read it.  I assume that`s where the £34m figure came from?  That is alot of money and would pay back our debts with a fair bit to spare.

People panicking about it should bear two things in mind:  a., I`m sure no deal would be done unless there was a 100-year lease or "sporting activities only" arrangement and b., A £1m a year ground rent is still alot less than the £1.8m or so we pay in interest each year- and we wouldn`t have the spectre of upcoming repayments hanging over us as we did to the tune of £2.5m last season.

It`s an uncomfortable thought for sure, but just remember that a certain G.Watling having bailed the club out from Chase stated that the clubs main problem was that it was "asset-rich, but cash-poor" and unfortunately under the previous board that situation got much worse rather than better.

[/quote]

"sporting activities only" easily gets overturned by developers these days and besides ''other business'' such as restaurants, retail, and hotel is already established at the stadium.

[/quote]

 

Not if its a covenant on the title it doesn''t!

[Ivana_rubyatitz 6]

[quote user="Yellow since 1977"]

The company who owned the property would be more than keen to increase its revenue by increasing the size of the stadium, they would probably pay for the new stand and add it onto the annual lease payment, as long as the interest is competetive this would be a good, quick and releatively cheap way of increasing the ground capacity.

The club would still recieve all the income from normal day to day activities as they would be seen as a tenent.

[/quote]

Why do I get the feeling you are one of those people who encourage the audience of the Jermey Kyle Show to consolidate all their debts into a single affordable payment? [;)]

[tom cavendish 0]

[quote user="Jim Smith"][quote user="Mark Rivers..."]

I guess the main problem would be, if we were to start doing well on the pitch again (I know we are but L1), reached top of the Championship and possibly the Premier League, and wanted to increase capacity, we would be unable to as we wouldn''t own it.  And would mean buying it back, and then building, unless the council/company decided to do it which I can''t see.

Also, wouldn''t all our income go down?  As where would the money from food and drink etc go, would we get it or would it be the company who owned CR?

[/quote]

 

I''m sure any lease would cover that and i''m sure we would be able to do it. The owner would hardly be likely to object to us increasing the capacity of the stadium as ultimately it would increase the value of the asset.

[/quote]

Of course new owners would be pleased to have the football club spend money on the stadium in the future as it would increase the value of the asset at no cost to the new owners.

But from the football club perspective they would be spending money on a stadium they didn''t own and they could use the asset as security in the future.

It''s rather like wasting money building a big extension on a house that you don''t own and are only renting it.

[tom cavendish 0]

[quote user="tom cavendish"][quote user="Jim Smith"][quote user="Mark Rivers..."]

I guess the main problem would be, if we were to start doing well on the pitch again (I know we are but L1), reached top of the Championship and possibly the Premier League, and wanted to increase capacity, we would be unable to as we wouldn''t own it.  And would mean buying it back, and then building, unless the council/company decided to do it which I can''t see.

Also, wouldn''t all our income go down?  As where would the money from food and drink etc go, would we get it or would it be the company who owned CR?

[/quote]

 

I''m sure any lease would cover that and i''m sure we would be able to do it. The owner would hardly be likely to object to us increasing the capacity of the stadium as ultimately it would increase the value of the asset.

[/quote]

Of course new owners would be pleased to have the football club spend money on the stadium in the future as it would increase the value of the asset at no cost to the new owners.

But from the football club perspective they would be spending money on a stadium they didn''t own and they couldn''t use the asset as security in the future.

It''s rather like wasting money building a big extension on a house that you don''t own and are only renting it.

[/quote]

EDIT: Typo

[Mr.Carrow 376]

But tom, if you were a secure tenant- on a 100-year lease say- and that extension in some way increased your income then it could be worth doing.

As has already been stated, the parent company may even pay for it if they get a cut of the profits.

[Lord Horn 0]

[quote user="Mr.Carrow"]

But tom, if you were a secure tenant- on a 100-year lease say- and that extension in some way increased your income then it could be worth doing.

As has already been stated, the parent company may even pay for it if they get a cut of the profits.

[/quote]

But how would you fancy changing your name to Mr Executive Developments plc???

[DOGGER 0]

[quote user="Lord Horn"][quote user="Mr.Carrow"]

But tom, if you were a secure tenant- on a 100-year lease say- and that extension in some way increased your income then it could be worth doing.

As has already been stated, the parent company may even pay for it if they get a cut of the profits.

[/quote]

But how would you fancy changing your name to Mr Executive Developments plc???

[/quote]

I suppose that the name may be the first thing to go in all seriousness!!

[tom cavendish 0]

[quote user="Jim Smith"][quote user="tom cavendish"][quote user="Mr.Carrow"]

It`s on the front page of the EDP, though i haven`t read it.  I assume that`s where the £34m figure came from?  That is alot of money and would pay back our debts with a fair bit to spare.

People panicking about it should bear two things in mind:  a., I`m sure no deal would be done unless there was a 100-year lease or "sporting activities only" arrangement and b., A £1m a year ground rent is still alot less than the £1.8m or so we pay in interest each year- and we wouldn`t have the spectre of upcoming repayments hanging over us as we did to the tune of £2.5m last season.

It`s an uncomfortable thought for sure, but just remember that a certain G.Watling having bailed the club out from Chase stated that the clubs main problem was that it was "asset-rich, but cash-poor" and unfortunately under the previous board that situation got much worse rather than better.

[/quote]

"sporting activities only" easily gets overturned by developers these days and besides ''other business'' such as restaurants, retail, and hotel is already established at the stadium.

[/quote]

Not if its a covenant on the title it doesn''t!

[/quote]

It means nothing because CR already has more than "sporting activities only".

[Lord Horn 0]

[quote user="tom cavendish"][quote user="Jim Smith"][quote user="tom cavendish"][quote user="Mr.Carrow"]

It`s on the front page of the EDP, though i haven`t read it.  I assume that`s where the £34m figure came from?  That is alot of money and would pay back our debts with a fair bit to spare.

People panicking about it should bear two things in mind:  a., I`m sure no deal would be done unless there was a 100-year lease or "sporting activities only" arrangement and b., A £1m a year ground rent is still alot less than the £1.8m or so we pay in interest each year- and we wouldn`t have the spectre of upcoming repayments hanging over us as we did to the tune of £2.5m last season.

It`s an uncomfortable thought for sure, but just remember that a certain G.Watling having bailed the club out from Chase stated that the clubs main problem was that it was "asset-rich, but cash-poor" and unfortunately under the previous board that situation got much worse rather than better.

[/quote]

"sporting activities only" easily gets overturned by developers these days and besides ''other business'' such as restaurants, retail, and hotel is already established at the stadium.

[/quote]

Not if its a covenant on the title it doesn''t!

[/quote]

It means nothing because CR already has more than "sporting activities only".

[/quote]

Anyone know where this comes from?  Can''t be a planning condition as the ground was constructed 12 years before planning laws came into being.

 

[Yellow since 1977 0]

Further to my earlier e-mails the property company who owned the site will normally be a Institution who are looking for long returns, i.e. pension funds so would in general be keen to forge a good working relationship with the club and look to develop the asset if posible.

More and more companies are looking at this type of venture as it does make good business and economic sense.

My company also owns all the BT estate, Department of Work & Pensions, DVLA, Barclays, so I can always put a word in but our MD is a Sheff Wednesday supporter!

 

[PurpleCanary 5,554]

[quote user="canary cherub "]

Bowkett said that "other clubs" don''t own their grounds - very true, but show me one who''s prospering, or who wouldn''t snatch your hand off for a ground of their own.

A desperately short term solution to the debt problem which takes the future of the club out of our hands.  A better option than administration?? - for the shareholders perhaps, but not for the long or even medium term future of the club, something they''ve always claimed to be so concerned about.

[:@]

 

[/quote]Yes. An idea that should only be considered as the very last resort. Even if it raised the unlikely figure of £34.5m.One recent example: Burnley sold its ground in 2006. Only four years later it already would like to buy it back. But doesn''t have the money.A suggestion. Anyone else who thinks this an idea of very last resort could do worse than write to Bowkett, telling him that.

[Felixfan 53]

I have been saying this for a long time either on threads here or at supporters meetings and it has been dismissed,but to be honest for a club like ours it is the only way forward as we are asset rich and cash poor. Either leaseback of Carrow Rd or sale and relocation to a purpose built 30,000 + out of town stadium with a sports/leisure/shopping complex.

Thank goodness the new board members can see that it is the best solution,and the sooner it happens the sooner we can move onwards and upwards.

 

[Lord Horn 0]

[quote user="Felixfan"]

I have been saying this for a long time either on threads here or at supporters meetings and it has been dismissed,but to be honest for a club like ours it is the only way forward as we are asset rich and cash poor. Either leaseback of Carrow Rd or sale and relocation to a purpose built 30,000 + out of town stadium with a sports/leisure/shopping complex.

Thank goodness the new board members can see that it is the best solution,and the sooner it happens the sooner we can move onwards and upwards.

 

[/quote]

You must mean the new Rackheath Eco-Stadium [:D]

[Old Shuck 183]

It has to be considered as an option. But it has to be right for everyone-not so easy.

Real Madrid got themselves out of a phenomenal debt by selling their ground and training facilities-to the Government I believe, anyone elaborate?-unrealistic cost, no doubt, but it was a way out for them.

Man City are tenants!

It happens. It can benefit clubs, or, otherwise, not affect their day to day running. But it can royally screw them up-Wimbledon, Wrexham, Oxford United...all non league now into the bargain.

Aviva or Lloyds TSB supposed potential landlords. The Aviva Stadium? Don''t have a problem with that, it''ll remain Carrow Road to me and thousands of others and we''d still call it thyat anyway!

I think a lot of the top continental clubs rent their stadiums as well-Bayern Munich possibly are one of them, and, isn''t the San Siro collectively owned?

So, renting a ground/stadium-not a problem. The terms can be. This is an interesting development. Its certainly not as easy as the club selling it, getting £35 Million, pay off debt, whoopee, heres a £12 million transfer kitty-or 12 years rent up front!...it might, it might, if it is considered, be part of a much longer term plan, to eventually relocate, a''la Brighton, Southampton...?

Needs thought and discussion-but cannot be dismissed, neither can it be embraced as a saviour-but needs to run a bit.

[Tangible Fixed Assets anyone? 0]

[quote user="Buckethead"]Do we have £34.5m equity in the club specifically in the ground itself?? I don''t think so, certainly the £16m net value touted by the club when PC was in the spotlight would back me up.
[/quote]

Exactly Buckethead! 

£34.5m! Some explanation is required for that figure.

[Erik the Viking 0]

Most clubs in Italy for sure are not owned by the clubs, and I believe many clubs in this country are in the same boat. Perhaps this is a viable option to take the club forward???

[Erik the Viking 0]

Sory meant most grounds/stadiums!

[Binky 0]

Understandably there is a lot of emotion contained in these posts -

and equally understandably, most of the comments come from a position

of considerable ignorance. A few facts:

1. technically no-one owns land in this country - the Crown does. We are, at best, "freeholders".

2. Many folk (eg those who own flats) are not freeholders but

leaseholders. Freeholds are nearly always preferable to Leaseholds -

but not always - it depends what rights either tenure bestows on the

owner - and what obligations.

3. Some freeholders may have onerous obligations eg to pay massive sums

towards the upkeep of the local church every fifty years or so.

4. Conversely, some leaseholds contain nothing more onerous than to pay

a fixed rent (eg £5 pa) and to keep the premises insured.

I may own the freehold of the driveway to my house which you share, but

if I don''t have a car and there''s no room to build a garage - but I am

obliged to keep the drive in good order for you, what''s my freehold

worth? (Not a lot to anyone but you).

IMO, selling and leasing back Carrow Rd could make lots of sense right now -

interest rates and investment yields are low - meaning capital values

are high. This is thanks to all that money sloshing around because of

Mr Brown''s "quantitative easing" or whatever. There are only two

possible objections as I see it: (1) once it''s sold, it''s sold and the

ability to raise finance again is gone and (2) the terms of the new

lease under which City would occupy the ground need to be considered

very carefully.

The first point is easily answered: the ground has no value as a means

of raising cash if you''re never ever going to use it as such. And in

any event, a "pre-emption clause" could be included whereby City have

first right of refusal if the new owners ever decided to sell.

The second concern is complex and needs careful thought - adding in too many conditions of the sale could reduce value - but:

1. the lease term could be for any term you like - eg 50 or 100 years if need be. I would not support a term of less than 30 years.

2. the higher the rent the higher the amount of cash raised - ie a two edged sword. It must be easily manageable from the outset and on the basis of a 25% drop in ticket sales.

3. a market rent could probably not be defined - but some form of

indexation to the cost of living or iinflation could be attractive to

investment hungry institutions.

4. we should avoid signing a "blank cheque" on rent in the future - ie

the maximum rent payable under any formula at any time should be known

or "capped" in advance - like many mortgages are  - that way the club

could budget more easily.

5. rent increases need be no more frequent than every five seasons -

possibly less frequent given the low rate of inflation everyone expects

to apply in future (ha!)

6. A possible sweetener for the purchaser - if they had the right to

use Carrow Rd on certain days of the year (eg out of season) for other

leisure activities like pop concerts.

7. The purchaser may want the right to redevelop the ground during the

lease: if so a new ground would need to be provided at their cost.

Personally I think this could be a great idea and fans would be wrong

to dismiss it out of hand. It would still be Carrow Rd, home of Norwich

City and still under the control of Norwich City. It is not so

different from taking out a big mortgage on the ground on favourable

terms - except few lenders could take such a long term view. The problem is the value. -This

would be heavily dependent on how the purchaser viewed the strength or

viability of the club - ie the ability to pay rent. Suggestions that

you could raise £30m for just an annual  rent of £1m is optimistic - after all, you could probably invest in National

Savings at a better rate than that.

[PurpleCanary 5,554]

[quote user="Binky"]a "pre-emption clause" could be included whereby City have

first right of refusal if the new owners ever decided to sell.  [/quote]With respect, Binky, such a clause would in practice be irrelevant. It is very difficult to imagine the financial circumstances under which the club would be able to afford to buy the ground back. Selling Carrow Road would have to be regarded as a terminal step, with us as permanent tenants.

[7rew 0]

Buckethead/TFAA

Surely the 34.5 million figure comes from the value as an investment opportunity rather than the actual land/structure value.

A 100 year lease at 1mill(+inflation) return each year is a tasty return for which you get the stadium at the end of as well, provided you expect the club to survive the 100 years.

You could also hedge against the possibility of the club ceasing to exist (a derivative) although these are harder to get these days.

It would probably - using the land value and hedging - be possible to guarantee a return with the club only surviving longer than 5 years or so.

Or would you expect an agreement to pay rent for a long term period to be free?

[. 0]

The Deliarite luvvies are finally reaping what they have sown..........

First they sell their soul.... and then they sell their kingdom.

Be happy.... as there will soon be nothing left but dust........

[In the blood 0]

Would this be the ideal opportunity for Cullum to invest money in the club by buying the ground? Or would his previous attempt to ''help out'' and subsequent rebuff means he now has shelved any plans to get involved?