Give Us A (Stratfield) Brake

[Isaac]

The impression the club give is that even if they wanted to extend the lease at the Kassam, they can't as the stadium company doesn't want to. I imagine Kassam is quite keen to cash in on the land.

from - https://www.oxfordmail.co.uk/sport/2024 ... -timeline/

“There’s no possibility to extend our lease for a long time,” the United chief said.

“We’ve tried our best to make that clear, it’s a question that we get asked on a weekly basis.

“The stadium belongs to Firoka and it’s their prerogative to do what they want with it.”

[slappy]

What I find interesting is that in the Dec 2021 accounts, there was a prior period adjustment to reclassify the stadium from depreciated cost within fixed assets, to at fair value within investment property.

"The valuation at 31 Dec 2021 was undertaken by the directors, having regard for rent and capitalisation rates. The most recent external valuation was undertaken in Sep 2021 .. also using a method of valuation whereby the rental income stream is capitalised at appropriate capitalisation rates (between 6.5% and 10%) based on comparable investment transactions".

Previous depreciated historic cost £6.7M
Revalued Sep 2019 £29.0M
Revalued Sep 2020 £27.5M
Revalued Dec 2021 £29.1M

"Investment property is defined in the glossary of FRS 102 as:
Property (land or a building, or part of a building, or both) held by the owner or by the lessee under a finance lease to earn rentals or for capital appreciation or both, rather than for:
a) use in the production or supply of goods or services or for administrative purposes, or
b) sale in the ordinary course of business. "

So i think the reclassification is correct, but wondering why it is so high?

[OtmoorYellow]

The impression the club give is that even if they wanted to extend the lease at the Kassam, they can't as the stadium company doesn't want to. I imagine Kassam is quite keen to cash in on the land.

from - https://www.oxfordmail.co.uk/sport/2024 ... -timeline/

“There’s no possibility to extend our lease for a long time,” the United chief said.

“We’ve tried our best to make that clear, it’s a question that we get asked on a weekly basis.

“The stadium belongs to Firoka and it’s their prerogative to do what they want with it.”

Whatever impression the club may be trying to give, the hard facts are that the license provides an automatic one off right of renewal for the tenant, based on the same terms as the existing license. I've got a copy of the license dated 21 March 2006 and it is very clear. Paragraph 10 states as follows:

"10 RENEWAL

10.1 At the end of the License Period the Club shall have the right to renew this License Agreement on identical terms (mulatis mutandis) except that the initial License Fee shall be the amount last reviewed under this License increased in accordance with clause 3.1(ii) and if the Club do wish to renew they shall serve written notice on the Licensor on or before the date six months before the end of the License Period.

10.2 The Club shall have the right to renew this License Agreement only once."

[OtmoorYellow]

One thing on the size - the new Spurs stadium is 200m by 250m in terms of footprint (at least according to wikipedia) so bigger than your theoretical Kassam footprint, but only by 30m in one direction (the Kassam is a spacious, terribly designed stadium after all). Obviously their capacity is bigger, so it'll go up higher but they've managed to build in various money making ventures into that Stadium, so presumably the same would apply for us. It cost in the region of £1billion though.

You'd hope the owners have a costed plan, if they don't we are well and truly up the creek. I share your concerns.

Those measurements are probably for the stands only. I've measured on a similar basis to the Kassam and Spurs comes out at 243m x 427m, although to be fair, the longer measurement includes an academy building, which OUFC wouldn't need.

[OtmoorYellow]

What I find interesting is that in the Dec 2021 accounts, there was a prior period adjustment to reclassify the stadium from depreciated cost within fixed assets, to at fair value within investment property.

"The valuation at 31 Dec 2021 was undertaken by the directors, having regard for rent and capitalisation rates. The most recent external valuation was undertaken in Sep 2021 .. also using a method of valuation whereby the rental income stream is capitalised at appropriate capitalisation rates (between 6.5% and 10%) based on comparable investment transactions".

Previous depreciated historic cost £6.7M
Revalued Sep 2019 £29.0M
Revalued Sep 2020 £27.5M
Revalued Dec 2021 £29.1M

"Investment property is defined in the glossary of FRS 102 as:
Property (land or a building, or part of a building, or both) held by the owner or by the lessee under a finance lease to earn rentals or for capital appreciation or both, rather than for:
a) use in the production or supply of goods or services or for administrative purposes, or
b) sale in the ordinary course of business. "

So i think the reclassification is correct, but wondering why it is so high?

There is a requirement to consider asset valuations every year. I would guess it dropped in 2020 due to the pandemic and the consequent drop in revenue.

Personally, I would have thought that £29m is a fairly conservative valuation for real estate in Oxford. If the club could buy at that, they would surely bite Kassam's arm off.

[Kernow Yellow]

We are not going to be homeless when the KasStad license ends as some have talked about, as there is a clause that permits renewal of the license on the same terms as the existing license.

We might be clubless though. The club is not viable financially while paying rent 'on the same terms' as the current license, and it is not in FK's interests to give us better terms (or do anything to benefit us really) when the land is so ripe for housing. If we can't get a new stadium, our owners and investors will walk, surely? There is nothing in it for them (or any other owner) at Grenoble Road.

I have heard rumours that there might be other land in discussion near the triangle too. If that's the case, the triangle is ideal for a stadium - so accessible from Oxford Parkway, and no stadium needs the terribly-designed Kasstad's footprint. I don't think our owners are likely to be about to saddle themselves with a white elephant.

But as with all things OUFC-related, I will believe any of it when I see it.

[OtmoorYellow]

We are not going to be homeless when the KasStad license ends as some have talked about, as there is a clause that permits renewal of the license on the same terms as the existing license.

We might be clubless though. The club is not viable financially while paying rent 'on the same terms' as the current license, and it is not in FK's interests to give us better terms (or do anything to benefit us really) when the land is so ripe for housing. If we can't get a new stadium, our owners and investors will walk, surely? There is nothing in it for them (or any other owner) at Grenoble Road.

I have heard rumours that there might be other land in discussion near the triangle too. If that's the case, the triangle is ideal for a stadium - so accessible from Oxford Parkway, and no stadium needs the terribly-designed Kasstad's footprint. I don't think our owners are likely to be about to saddle themselves with a white elephant.

But as with all things OUFC-related, I will believe any of it when I see it.

We would be far more likely to be clubless with an unaffordable stadium. I gave the comparative figures above. There is no point building a new stadium that the club cannot afford to finance. The club is financially viable on the present terms at Grenoble Road. Possibly not at the level we want the club to be at, but it can survive and it does survive.

I am sure you understand that simply building a new stadium is not the solution to the club's problems. It must have commercial revenue attached, which results in commercial profits, which funds the stadium cost, the club's losses and investment in the team to get the club higher up the pyramid. The present shareholders aren't in the business of giving away free stadiums.

I hope you are correct that there would be additional land in The Triangle deal, because it is difficult to see how it works for OUFC otherwise.

[Kairdiff Exile]

Strong agree with OY. Oxford United Football Club do not benefit from commercial revenues at their current ground, they won't be benefiting from them at the new one.

The best-case scenario is that there are commercial revenues to be had at The Triangle and the owners plough back some of them into the club and we get a better stadium which can generate more atmosphere and bigger crowds to the team's benefit. We might get a legal agreement to play at the stadium on affordable terms for a substantial (eg, 100yrs) period and in time maybe the supporters' trust can build up a shareholding in the StadCo so we have some control of our own destiny.

The worst-case scenario is that we end up paying more in rent than we do now in a(nother) stadium which is a soulless box on the edge of the city without much commercial income to be made. Down the line, if ownership of the stadium changes hands to a less-benign owner, we could be threatened with eviction and find ourselves in the same situation we are now.

The most likely scenario is somewhere between the two. We get a good few years of the current board subsidising the club with modest commercial incomes and can grow our own revenues by increasing crowds and sponsorship. That might insulate us against the next time we have a dodgy owner of the club or StadCo, but it won't protect us entirely.

Maybe I'm wrong and there's another way. If so, I'd genuinely love to hear it.

[Kernow Yellow]

The club is financially viable on the present terms at Grenoble Road. Possibly not at the level we want the club to be at, but it can survive and it does survive.

I think that rather depends on how you define financially viable. The club survives because rich people bankroll it, not because it is profitable or breaks even. Our owners are only financing the club on the basis that some property play will enable them to make back their money - without that they would surely be likely to leave us in the shit.

None of which is to say that I in any way underestimate the obstacles and hurdles to making us financially viable in a new ground (or even getting one built at all). But neither do I think that the status quo is sustainable without the prospect of a different arrangement down the line.

[OtmoorYellow]

The club is financially viable on the present terms at Grenoble Road. Possibly not at the level we want the club to be at, but it can survive and it does survive.

I think that rather depends on how you define financially viable. The club survives because rich people bankroll it, not because it is profitable or breaks even. Our owners are only financing the club on the basis that some property play will enable them to make back their money - without that they would surely be likely to leave us in the shit.

None of which is to say that I in any way underestimate the obstacles and hurdles to making us financially viable in a new ground (or even getting one built at all). But neither do I think that the status quo is sustainable without the prospect of a different arrangement down the line.

That’s very true, however the present spending levels on playing and back room staff are choices. That’s why I said the club is financially viable under the present license terms, just not at a level we might find acceptable.

Notwithstanding that I entirely accept the point about the present owners, the choice to accept losses has been made be several consecutive owners without property development plans, with the losses paid for by an increasing club value on their departure.

It’s not a model that sits comfortably by any means, but it may become a choice between that and risking the club’s future on an unaffordable stadium.

[Kairdiff Exile]

A cautionary tale for anyone naive enough to think that things move quickly and easily with local authorities. Today's Oxford Mail declares that the Cowley Branch Line (which would include a station to serve the Science Park and the Kas Stad) is one step closer to completion after winning the backing of councillors. The article states confidently: "The line, which is currently used for freight serving the BMW plant in Cowley, could be opened as early as December 2026".

Pardon my scepticism, but I last wrote about the topic on here in 2019 when estimates suggested we might see trains serving passengers on the line during 2020. Prior to that, in 2014, Chiltern Railways said that they hoped to get trains running by the end of the decade.

If getting permission for something at The Triangle gets delayed by anything - and my point is that it probably will because public bodies don't move quickly - then we may yet end up being able to catch a train to Grenoble Road for home games in the meantime!

[OtmoorYellow]

I've now been (hopefully reliably) informed that the club agreed to a re-negotiated license, since the one I hold, without the right of renewal included.

That was a bit (a lot) bonkers in my view, without a credible alternative in place. So now we do face homelessness. Not very clever, and the club's board have left it very late indeed to be chasing a serious alternative.

[slappy]

I've now been (hopefully reliably) informed that the club agreed to a re-negotiated license, since the one I hold, without the right of renewal included.

That was a bit (a lot) bonkers in my view, without a credible alternative in place. So now we do face homelessness. Not very clever, and the club's board have left it very late indeed to be chasing a serious alternative.

I am still worried that our owners have said nothing for months. I've downloaded a very long presentation with possibilities on how the new stadium could work with the triangle, but in the overall scheme of things, that won't have cost a fortune and could be written off as a sunk cost.

Our manager is struggling on and several people can see us sleepwalking into relegation. Perhaps it is cheaper not to get rid now, but two loan signings in the transfer window is hardly a show of confidence. Mousinho could have been the one to step up, but he has already made the jump to what I would say is a big club for his first managerial appointment.

Nonetheless we do still have new people on the ground making the right noises with Grant Ferguson as chairman and Tim Williams as CEO.

[Jimski]

I remember it being mentioned, way back when we built the then new stadium that there would be some kind of "covenant" or similar that meant that the land it was built on couldn't be used for another purpose if Oxford didn't have somewhere else to play. Does anyone else remember anything about that, or is it my memory playing up completely?

[Isaac]

It looks (at least if this link is to be believed) like the covenant only covers 25 years so expires at the same time.

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