Stadium Cost

[ty cobb]

Theres a lot of talk at the moment about FK being unreasonable with his demands for the stadium.

Did anyone ever come up with a figure that should be acceptable to him and fair for us, i.e. one that reflected the actual costs to him, a reasonable return on these costs, an element of reward for taking the investment risk and set off against this taking account the fact that he got land in Oxford on the cheap as a result of being involved in the club which meant that he was able to build a seemingly profitable (how much money is the leisure centre, cinema, hotel etc making?) complex by the stadium?

If not has anyone got any idea what the figure should be? If not has anyone got any idea what the figure should be?

I’m all for boycotting the things that he owns but I’d like to be doing it because he’s being unreasonable rather then because Merry (and his supporters who seem as bad as each other) say so.

[Pe├▒a Oxford United]

The problem with questions about &quotreasonable&quot prices are, among others:

(a) in most circumstances, the price of anything is what the holder is prepared to sell it for, regardless of whether or not anybody else considers it reasonable

(b) Firoz Kassam is not really a reasonable man, except for definitions of &quotreasonable&quot which mean &quothe gets what he wants&quot and do not mean &quotintransigent&quot.

[OUFC4eva]

WPL were perfectly happy to pay £10m for the Stadium and £3m for
the Conference and Banqueting Centre and have a first option to
buy. The option I seem to recall lasted three years from 2006 when the new license was drawn up.

The £10m is somewhere close to the build cost and £3m was a fair valuation based on the Conference Centre's EBITDA (essentially it's free cashflow) 6 x £500k per annum gives the £3m valuation.

People say the Quadrangle loses money but there are cross business costs in there relating to the Holiday Inn franchise. Kelvin Thomas was adamant thet the Conference Centre was easily worth £3m. He said that very recently. The Stadium valuation is the obvious stumbling block.

£13m means FK clears all the stadium borrowings and makes a small profit
after expenses and sundries.

[Snake]

The problem with questions about &quotreasonable&quot prices are, among others:

(a) in most circumstances, the price of anything is what the holder is prepared to sell it for, regardless of whether or not anybody else considers it reasonable

(b) Firoz Kassam is not really a reasonable man, except for definitions of &quotreasonable&quot which mean &quothe gets what he wants&quot and do not mean &quotintransigent&quot.

We really ought to have a poll along the lines of who is our favourite ever owner of OUFC - but the trouble is that I doubt anyone would cast a vote.

[Mally]

WPL were perfectly happy to pay £10m for the Stadium and £3m for
the Conference and Banqueting Centre and have a first option to
buy. The option I seem to recall lasted three years from 2006 when the new license was drawn up.

The £10m is somewhere close to the build cost and £3m was a fair valuation based on the Conference Centre's EBITDA (essentially it's free cashflow) 6 x £500k per annum gives the £3m valuation.

People say the Quadrangle loses money but there are cross business costs in there relating to the Holiday Inn franchise. Kelvin Thomas was adamant thet the Conference Centre was easily worth £3m. He said that very recently. The Stadium valuation is the obvious stumbling block.

£13m means FK clears all the stadium borrowings and makes a small profit
after expenses and sundries.

Sounds like a fairly good summary of the situation.

The root problem here is that the stadium, of course isn't worth anything like the £10 million asking price on a purely commercial basis. It wasn't worth that much when Herd and Cox planned it (even though they were planning to spend a lot more), it wasn't worth that much when Kassam completed it and it certainly isn't worth that much to a struggling conference side that can barely fill a third of it every other week.

One thing that puzzles me a bit is the ratio of rent to value or the rental yield. I'm not an expert in this area but with a yield of lets say 5% and with the annual rent (excluding admin overheads) at about £300,000 it would suggest a value of around £6 million. I can't believe Kassam is giving the club a 40% discount on the rent so you have to assume the true value is around £6million on an open market - trouble is it isn't an open market.

[DLT]

Going off at a tangent. How soon until WPL renegotiate the stadium rental price by agreeing to only two stands being opened on matchdays?

[Pe├▒a Oxford United]

Another tangent, involving Selhurst Park.

[OUFC4eva]

Interesting article.

[Snake]

Going off at a tangent. How soon until WPL renegotiate the stadium rental price by agreeing to only two stands being opened on matchdays?

Why open two when the South Stand on its own would do the job?

(and that's where all the nice food is served upstairs).

The away fans could be shoved into the west end of the SSL.

[A-Ro]

The away fans could be shoved into the west end of the SSL.

Good idea not quite thought through enough.

[Snake]

The away fans could be shoved into the west end of the SSL.

Good idea not quite thought through enough.

Why? Is that still the kiddie pen?

Or, given that we often have around 10 Exec Boxes empty each game how about putting them in there? And the Directors box, as that's half empty these days as well.

[Ascension Ox]

Another tangent, involving Selhurst Park.

Mmm, Paul Kemsley gets around a bit doesn't he?

[Pe├▒a Oxford United]

Should I recognise the name?

[A-Ro]

The away fans could be shoved into the west end of the SSL.

Good idea not quite thought through enough.

Why? Is that still the kiddie pen?

Or, given that we often have around 10 Exec Boxes empty each game how about putting them in there? And the Directors box, as that's half empty these days as well.

I think it is the kiddy pen, the problem is the rest of the west end SSL, for segregation to work you would have to move all the season ticket holders so that the away fans could have their own entrance, refreshment and toilet facilities.

There are a lot of season ticket holders there as well. The block where I sit (the one next to the half way line) I would estimate is 90% season tickets holders with the next block over not a lot less.

You would alienate a lot of people if you asked them to move from seats they've occupied since the start especially as there are no comparable seats left in the SSL.

Exec boxes have the same issue, no segregation of entry or facilities.

[GodalmingYellow]

The problem with questions about &quotreasonable&quot prices are, among others:

(a) in most circumstances, the price of anything is what the holder is prepared to sell it for, regardless of whether or not anybody else considers it reasonable

(b) Firoz Kassam is not really a reasonable man, except for definitions of &quotreasonable&quot which mean &quothe gets what he wants&quot and do not mean &quotintransigent&quot.

The price or valuation of anything is what can be agreed between a willing seller AND a willing buyer.

A person might not be prepared to sell their house for less than £1m, but that doesn't make their house worth £1m.