Stadium refinancing idea

[Ale taster]

To be fair I'd be up in arms if he said he couldn't finance a promotion push from the championship so was going to raise £40m by refinancing the stadium and plough it into a transfer fund. That would be serious alarm bells because knowing us the players would do shit, we'd not go up, we'd lose money on them all and suddenly we'd be left in debt. Thankfully what he's considering is very different. If (and I don't know enough about business to assess the likelihood of success) there is a way of utilising the asset to bring us a steady, relatively guaranteed income stream, it sounds sensible.

Glad they're at least thinking of things like this. We all want to be in the PL, and we want to be challenging there (not saying Europe, but fair to say we all strive for more than constantly battling relegation). To do that we'll need to come up with new revenue streams. We have a lot of fans but, due to fair ticket prices, it doesn't relate to higher gate receipts than many clubs with considerably smaller crowds. In the PL at least there's the tv money I suppose, but certainly to finance getting into it in the first place we'll need to be a bit creative



Not seen many like that tbh, certainly no "he doesn't know what he's talking about, this is what he should be doing" posts. Just people discussing something from a podcast; thankfully you don't need to be an expert to have an opinion on a message board, if you did this place would be very, very quiet. We all give our opinions on professional footballers without being experts, this is no different

At last, a voice of common sense and reason.

 

[Chewit]

That’s not a bad idea business wise.

The club has an asset that stands empty most of the time and doesn’t make a return. Use some of the asset value to generate more return on capital employed.

Just need to make sure that they don’t lose control of the SoL and that they invest in profitable hotels.

Exactly are we a football club or a hotel chain.
Raising short term funds against the family silver is madness in my opinion. It will be a never ending spiral which will end up with us not owning the ground.
SD could find himself the least popular owner of all time if he did that.

This is different. They’d be replacing asset value with different asset value.

Imagine living in a git big house that you own outright. You remortgage half and use the money to buy some letting houses to generate an income.

You still own the same value of assets. But now you also have a cash stream.

Yes if the businesses you invest in are successful ... what happens when they are not?

 

[Mr RAWhite]

Exactly are we a football club or a hotel chain.
Raising short term funds against the family silver is madness in my opinion. It will be a never ending spiral which will end up with us not owning the ground.
SD could find himself the least popular owner of all time if he did that.

Or could increase our regular income.. Haven't Man City invested in hotels etc?

 

[oddbod]

It's about long term self sustainability. Not Stewart Donald and Sartori ploughing in money Ellis Short style.

Have you not seen people one here banging on about the financial resourses that especially santi has as if they are going to unleash it when we reach a certiain as yet undefined point............your right if this was purely a business well then self sustainability would be very popular form of growth but its not just a business its a football club trying to grow and attract supporters back to the club.you cannot seperate out this emotional side from the business that is football.........its impossible to do this if a club has ambition.............i want my club back where it belongs in the top 8 of english football and to stay there and thats the emotional side of being a supporter .........putting my logic head on i look at the the top ten of english football over the last 20 years and nobody has managed to stay there long term without significant outside investment.
So it great for donald to be sustainable as much as he likes but i guess history tells us that the gulf is to big for anybody to overcome with money generated from ticket sales and investments made on our assests ..we will need money invested in the club its a simple as that ..Donalds model appears to have us balancing the books and hanging round the upper part of the championship with a possibility of a promotion bobbing up and down like a mag avoiding the soap in the bath................. all childlike and obnoxious responses will be ignored!

 

[Chewit]

Or could increase our regular income.. Haven't Man City invested in hotels etc?

If it was that easy to make additional income streams why don’t you mortgage half your house and invest it? You would be mega rich in no time.
Let’s invest in hotels let’s say £25m a time and there is an economic crash and the market has to many hotel rooms so you start selling your rooms cheap so cheap you don’t make any money. Bang goes your income stream. Then guess what as your hotel makes no money its pretty worseless so you can’t get your £25m back. What’s more in 10 years time to make the hotel competitive again you have to spend £5m refurbishing it... where is that coming from.
There is an economic crash every 10 years or so... I don’t want my club subject to the risk of losing its ground on the unpredictability of markets.
The ground is a community asset something which should not be used on a roulette table.

I know nothing about such matters unlike SD who clearly does.
Making your assetts generate income does sound sensible though.

I would rather they shared it with another sport or another team ... at least then there’s no risk and the asset is being better utilised

 

[JJH]

The Hilton was £12m mate.

Was it really, never knew that.
However its not very big and I would put a pound on it not making anywhere near £2.5 profit.

 

[raven_5]

If it was that easy to make additional income streams why don’t you mortgage half your house and invest it? You would be mega rich in no time.
Let’s invest in hotels let’s say £25m a time and there is an economic crash and the market has to many hotel rooms so you start selling your rooms cheap so cheap you don’t make any money. Bang goes your income stream. Then guess what as your hotel makes no money its pretty worseless so you can’t get your £25m back. What’s more in 10 years time to make the hotel competitive again you have to spend £5m refurbishing it... where is that coming from.
There is an economic crash every 10 years or so... I don’t want my club subject to the risk of losing its ground on the unpredictability of markets.
The ground is a community asset something which should not be used on a roulette table.




I would rather they shared it with another sport or another team ... at least then there’s no risk and the asset is being better utilised

I agree. It's a big risk and the club might end up dragging a nonprofitable hotel chain at some point.
And 2.5m per year is peanuts for a club hoping to be in the Premier League in a few years anyway. Not worth the risk.
If they run the club well they might sell it for a profit soon to someone who can put more than 2.5m in the club every year.
So no, I can't agree putting the ownership of the stadium at risk.
Nothing against Donald, has done a very good job so far, but this idea is a bad one imo.

 

[Jonny]

To me it sounded like the plan originally was to get us promoted and then get some of Jauns mates involved. That means Donald has to give up some of the control he has.
I think he’s liking being the owner of a big club and is trying to see if he can make it work without selling part of the club.
I’m all for thinking outside the box and happy for them to look at anything they think may generate extra funds.

 

[AndrewP]

I’m all for thinking outside the box and happy for them to look at anything they think may generate extra funds

I'm not happy with the idea of mortgaging the stadium and spending it on hotels. Stupid idea imo.

If he comes up with a good idea instead then Id be all for it.

May as well float the club on the stock market to raise revenue.............

 

[kildaremackem]

Would many people remortgage their house to buy a business?? I know of two people that did and both lost their houses. Its always a gamble, and im not sure the amount of money generated is worth the gamble. The best thing any club can do is own their ground outright

if you remortagtged buy footballers its a terrible idea..but if you do it to buy more assxtes, oreferably assets that are not football related itsa a good idea..becausre then..you can sell thoseother assets in an emergency..rather than sell the ground..however im not sure hotels are the assets i would want..

 

[Ale taster]

To me it sounded like the plan originally was to get us promoted and then get some of Jauns mates involved. That means Donald has to give up some of the control he has.
I think he’s liking being the owner of a big club and is trying to see if he can make it work without selling part of the club.
I’m all for thinking outside the box and happy for them to look at anything they think may generate extra funds.

He states this as a possibility just before mentioning the idea of using club assets to create other income streams which would keep his personal interest going. Wouldn't be surprised if both things happened in a two prong approach. I'm sure the 'hotels' were very much just 'as an example'. It might just as easily have been a national chain of dental practices or cinemas or anything that would guarantee a fixed income stream.

 

[Boris Bear]

Only if it’s invested in Sunderland

 

[gipetto]

Loaning money isn't a revenue stream imo and quite frankly I don't have the utmost faith in the scouting department.

Just my opinion but it isn't something I would endorse what so ever.

Most businesses loan money, especially in their infancy. If Donald can make it work and it means we have additional revenue coming into the club, I don't see why it shouldn't be pursued.

 

[The Muffin Man]

My only concern is why on earth would they want 4 hotels around the ground?

Im assuming he is talking about building 4 hotels in places where they are likely to have high occupancy and therefore the best return possible........Like any investment it is a risk but a relatively low risk given you are investing the money in bricks and mortar which mitigates any loss should you ever decide to sell it.

Only if it’s invested in Sunderland

Bugger that, if there is a way of making serious money then deffo invest it in Sunderland but if they are talking about hotels I would like to see them build hotels where the likelyhood of full occupancy is at its highest, probs London/Manchester/Edinburgh/York/Lakes etc......It makes no difference where the money is invested, it is about freeing up money from the stadium to make more money for the squad.....This has to be done with the least risk possible and building hotels in Sunderland is definitely not risk free.

 

[JL1985]

Coventry City did this.

 

[iansun]

I'd rather they renamed the ground with sponsorship personally

 

[Mboma]

I've just listened to the podcast and (to me) the hotel idea sounded like it was just one idea of many and not set in stone.

Personally, I like the idea that we can get the stadium generating money itself when not in use, the concerts coming back are great for the city as well as the club but I like how SD has got his thinking cap on about what else we can do.

I don't think the hotel idea is that far down the line and its probably unlikely to see the light of day but it would be funny to get one in Newcastle and take advantage of the stag and hen do's.

 

[joop]

Coventry City did this.

Did what? Buy hotels by mortgaging the stadium or something else? Genuine question as I know they lost their ground but don’t know the story behind it.

 

[JL1985]

Did what? Buy hotels by mortgaging the stadium or something else? Genuine question as I know they lost their ground but don’t know the story behind it.

They have been tenants in the Ricoh arena since it was built. It's was never their stadium. It's caused them so many problems. They were promised priority to the stadium then Wasps rugby offered to pay more rent and now have priority over the stadium. Fortunately Wasps want to play on Sunday's rather than Saturday's. It's a mess.

I highly doubt it would happen here but I would be against not fully owing the stadium.

Coventry also only receive a small percentage of matches your revenue. The rest goes to the stadium owners.

 

[kildaremackem]

If it was that easy to make additional income streams why don’t you mortgage half your house and invest it? You would be mega rich in no time.
Let’s invest in hotels let’s say £25m a time and there is an economic crash and the market has to many hotel rooms so you start selling your rooms cheap so cheap you don’t make any money. Bang goes your income stream. Then guess what as your hotel makes no money its pretty worseless so you can’t get your £25m back. What’s more in 10 years time to make the hotel competitive again you have to spend £5m refurbishing it... where is that coming from.
There is an economic crash every 10 years or so... I don’t want my club subject to the risk of losing its ground on the unpredictability of markets.
The ground is a community asset something which should not be used on a roulette table.




I would rather they shared it with another sport or another team ... at least then there’s no risk and the asset is being better utilised

i am wary of them doing this..it could work and obviously stewart and juan gave been successful at running other businesses..but it could be a game changer..

I'd rather they renamed the ground with sponsorship personally

they can do all of those things..