Re: Etihad Campus & potential new stadium
I got a message from the same lad on SSC after posting on the training ground thread on there on Friday. I replied to tell him that City own the training ground site and lease the stadium. He wrote again asking for specific figures but he won't find the acquisition costs of the training ground in the public domain.
In terms of whatever 'scandal' there may be, costs are exempt expenditure for FFP purposes. There may be a state aid issue under European law, I suppose, if they've been given the land on the cheap, but it's probably been done in a way that complies with the law. Anyway, it's not a UEFA matter, IMO.
As for MCFC's ownership of the stadium, there's no way we'll pay anything remotely approaching £740 million because MCFC have an option to acquire the freehold under the lease anyway in accordance with a set formula. As I understand it (and the source was David Bernstein in January 2003, so I'd expect him to have known), the payments of 'rent' are set off against the purchase price anyway, and the purchase price reduces over time. It's unthinkable that the club negotiated this away when renegotiating the lease.
The cost of exercising MCFC's option is a matter of conjecture. However, to give a view of future liabilities, our accounts express amounts owing under the lease as money owing a notional finance lease. I'd venture to suggest that this is not a million miles from the cost of exercising the option. It was a little under £60 million in the accounts about 3 years ago, if I recall correctly. I tried to check last night what it was in the most recent accounts, because this would be the only time htis has been calculated for the audited accounts since the lease was renegotiated. However, the link to the 2011 accounts on the MCFC official site is dead.
The purchase price figure has, I assume, been adjusted to take account of the amendment to the lease reported in the media a couple of years ago, which allowed City to sell naming rights for the stadium, with the Council taking a cut. Presumably, too, there are detailed provisions relating to the expansion of the stadium.
Bernstein, back in 2003, said that he couldn't see it making commercial sense for MCFC to exercise its option on the freehold for 20-30 years. However, the arrival of ADUG changed the financial perspective dramatically, and obviously the cost would be loose change to the current owner. The club has opted to wait, carry on paying rent and exercise the option at a later date. This is out of deference to MCC: if we exercised the option, the money would go straight to Sport England to repay the residual value of their grant whereas if the lease stays in place, the money goes straight to MCC in whose hands it's ringfenced to be spent on sports facilities.
In terms of the costs, Sport England paid GBP 77 million towards the construction of CoMS out of an overall cost of GBP 110 million (David Conn gives slightly different figures and he may be right but they're not wildly different and I don't have time to look them up before I go to work). The Council paid the rest, and City gave up the Maine Road (site value £27 million) to the Council in return. I believe that the eventual sale of Maine Road realised between a half and a third of that value (so somewhere between £9 million and £13.5 million) when MCC eventually disposed if it - different people give slightly different information.
IIRC, though it's from memory and you can look up the old media reports online to be exact, City paid £14 million in rent over the first 8 years of the lease. The MEN has reported that the new figure is £3 million per year as a flat rate (i.e. irrespective of attendance revenues, which underpinned the previous formula, but presumably that is index linked.
jrb said:
jrb said:
I got a message from the same lad on SSC after posting on the training ground thread on there on Friday. I replied to tell him that City own the training ground site and lease the stadium. He wrote again asking for specific figures but he won't find the acquisition costs of the training ground in the public domain.
In terms of whatever 'scandal' there may be, costs are exempt expenditure for FFP purposes. There may be a state aid issue under European law, I suppose, if they've been given the land on the cheap, but it's probably been done in a way that complies with the law. Anyway, it's not a UEFA matter, IMO.
As for MCFC's ownership of the stadium, there's no way we'll pay anything remotely approaching £740 million because MCFC have an option to acquire the freehold under the lease anyway in accordance with a set formula. As I understand it (and the source was David Bernstein in January 2003, so I'd expect him to have known), the payments of 'rent' are set off against the purchase price anyway, and the purchase price reduces over time. It's unthinkable that the club negotiated this away when renegotiating the lease.
The cost of exercising MCFC's option is a matter of conjecture. However, to give a view of future liabilities, our accounts express amounts owing under the lease as money owing a notional finance lease. I'd venture to suggest that this is not a million miles from the cost of exercising the option. It was a little under £60 million in the accounts about 3 years ago, if I recall correctly. I tried to check last night what it was in the most recent accounts, because this would be the only time htis has been calculated for the audited accounts since the lease was renegotiated. However, the link to the 2011 accounts on the MCFC official site is dead.
The purchase price figure has, I assume, been adjusted to take account of the amendment to the lease reported in the media a couple of years ago, which allowed City to sell naming rights for the stadium, with the Council taking a cut. Presumably, too, there are detailed provisions relating to the expansion of the stadium.
Bernstein, back in 2003, said that he couldn't see it making commercial sense for MCFC to exercise its option on the freehold for 20-30 years. However, the arrival of ADUG changed the financial perspective dramatically, and obviously the cost would be loose change to the current owner. The club has opted to wait, carry on paying rent and exercise the option at a later date. This is out of deference to MCC: if we exercised the option, the money would go straight to Sport England to repay the residual value of their grant whereas if the lease stays in place, the money goes straight to MCC in whose hands it's ringfenced to be spent on sports facilities.
In terms of the costs, Sport England paid GBP 77 million towards the construction of CoMS out of an overall cost of GBP 110 million (David Conn gives slightly different figures and he may be right but they're not wildly different and I don't have time to look them up before I go to work). The Council paid the rest, and City gave up the Maine Road (site value £27 million) to the Council in return. I believe that the eventual sale of Maine Road realised between a half and a third of that value (so somewhere between £9 million and £13.5 million) when MCC eventually disposed if it - different people give slightly different information.
IIRC, though it's from memory and you can look up the old media reports online to be exact, City paid £14 million in rent over the first 8 years of the lease. The MEN has reported that the new figure is £3 million per year as a flat rate (i.e. irrespective of attendance revenues, which underpinned the previous formula, but presumably that is index linked.