Sale of Shay

I have waited some time before joining this debate. I started this post some time ago and I kept adding to it!I have had strong views since day one but I wanted my response to be considered and I hope understandable. When you first look at the Shay Stadium reports in the Courier it appears at first glance it sounds very interesting. Both clubs will pay less rent, new shops and businesses to create hundreds of new jobs. Both clubs will secure and the stadium will be developed to become the focal point of sport in Halifax and the community. Truly excellent news; just what is needed! But hang on something just doesn’t add up. Why would a successful and competent businessman pay £1.9M for a site with just two revenue streams i.e. Rugby and Football clubs. Both are hardly money making machines and unlikely to become so. The football club according to a Director need 1600 to break even. Despite a good start to Conference life this is not being achieved. The Rugby Club are allegedly substantially behind with rent to the council, and current performance levels tend to indicate the trend of falling attendances will continue, certainly in the short term. He has already indicated rents for the two clubs `will be reduced’ I am missing something here. Perhaps somebody out there who knows modern business methods can tell me how you can pay the best part of £2Million for the site and where are the income streams coming from to a) pay for the purchase and b) finance all the additional items to further transform the stadium. As mentioned earlier he (according to the courier article) has already promised to reduce the rent paid by both clubs. I obviously do not know what the actual rents being paid by both tenants is but let’s say for an example both are paying 100K to the council. The profit element of £200K (after expenses for actual usage and maintenance is deducted) is certainly not enough to finance a £1.9M purchase. Also the additional liability of the drainage remains to be sorted. I am sure I read that this is likely to cost £1/4M (a proportion apparently to be funded by grants but the balance to be funded by the owners is still substantial)to be properly resolved; is the new landlord going to fund this? Some contributors particularly those with stronger associations for the rugby club seem to be saying to supporters of the football club; that the latter are simply envious of a new benefactor with strong and public connections to the rugby club. I enjoy both codes and I really want both to continue and survive (and hopefully) prosper in the future. Putting the Stadium in `a private’ hand is `potentially’ disastrous and is the most risky option. Problems may not occur for a few years (but could come a lot quicker) Those who thinks tenants are be protected by 100 year leasehold, clauses `guaranteeing’ use by the sporting clubs, and restrictive covenants banning future change of use sales etc I am sorry but you need to be aware the opposite is true. All these clauses and covenants are not 100% guaranteed and in today’s commercial world these would be overturned by any half decent legal team in The High Court. You just need to look at the ingress of private housing/business usage into supposedly sacrosanct green field sites for evidence that climates and opinions are changing. You really need to ask yourself which option 1) private or 2) council ownership has the best chance of preserving the stadium/facilities/location for permanent use by both teams. I stump for the latter option not because I think the council are the best thing since sliced bread; probably the lesser of two evils. I use the drainage problem as an example; I am sure that if the council retain the ownership of the shay stadium the drainage problem will be definitely be sorted (eventually) Some poster I think `bubba’ have also raised a third option of making the club is managed and owned by the community/supporters/and or Trust; I appreciate some out their think this is the way forward. I simply wish them well in their efforts but I don’t see how this is viable with the income streams currently available and likely to be generated in the future will adequately fund operating, maintaining and developing The Shay Stadium. With private ownership the decision to proceed or not is totally based on income streams and profit levels etc; the council would have to be slightly different and have more of a community based ethos/responsibility to ensure the Shay is fully functioning. A commercial organisation in today’s economic climate probably could struggle to do a satisfactory business case for spending £250K on the pitch. Particularly if one tenant or both are behind in rent, could and would be used by the principals as a valid reason for not undertaking the work, or more likely to be used as a valid excuse (sorry business justification) for delaying the work to an unspecified time in the future.
As an aside I was first heard that £1.9M had been offered for the Shay, my first reaction was this figure was something akin to giving away the family silver. I am not a surveyor or have any knowledge of commercial land prices, but for a large prime site near the Town Centre the price looked embarrassing low. I nevertheless satisfied myself thinking the council would have a legal remit to ensure they obtain a price based on a full market valuation. I was amazed to learn that the council are under no such remit. They don’t have to accept only a full market valuation; instead they are legal charged to ensure that all valid bids, properly constituted and robust are fully investigated. As I say I don’t know if this is true, but it would fit the story that a bid of (only) £1.9M is being processed. But back to the main point - I read somewhere that Roman A @ Chelsea has `invested’ £400M+ into the club and apparently he can take out this money (no notice needs to be given) at any time he sees fit. Chelsea supporters are very happy to have him underwriting the club big time, but he ever has a chance of heart Chelsea will go into freefall (ala Portsmouth) Mr A and his companies could be the best thing to happen to the rugby club since Mr Gartland. But Mr A rather his company, could sell his £100K of shares tomorrow. Looking at a balance sheet provided on another posting it already arrears `Directors loans’ are keeping the rugby club solvent. If he or one of his companies buys the stadium, and he or his companies has a change of heart and decides to take himself or his business in another business direction. He can and will be able to sell his property to anybody he wants to, and both club as tenants will have very limited rights. This scenario would never happen if the council retains ownership. I do think the council with the current economic climate and the strain on resources would love to sell this white elephant that is the Shay Stadium. But they retain ownership they do have a legal right whilst it is open to ensure proper management of the facility. I think in some bizarre way this situation is not unlike what happened at Thrum Hall with sale of the ground. I am not suggesting any improper behaviour from any of the parties involved in that sale. But I think it would be the ultimate irony if the following scenario took place. Mr A and his company buy the Shay, but quickly find developments to increase revenue on the site do not materialize, and the venture no longer is profitable or viable. He then sells the whole site to Tesco or Barratt for substantially more than he or his company paid. As part of the deal to boot us off site (sorry sweetener) they agree to build us a new ground on some (sorry secondary grey field industrial land) site in the middle of nowhere which is value for money i.e. cheap. At first glance you would be in uproar at such a plan. But is this so out of the question. Both clubs don’t need 12,000 stadia. A low cost sports facility which is more in keeping with the level of professional sport being played and the attendances being generated is required. The clubs need to be realistic in their expectations for the future. Unless we suddenly acquire the support of someone with buckets of money to throw at the club (I don’t think Mr A is in this category), we are going nowhere; Championship 1 is our level. This is the first time I have acknowledged that the top tier of the game is beyond us. So why don’t we admit our limitations and make plans accordingly. I remember going to Workington rugby (or was it Whitehaven) a few years ago for a cup match after they had largely rebuilt their ground I think from an EU grant. A local told me a figure which unfortunately I can’t remember but it was low, very low. The East Stand cost £6M (and still needs a corner sorting) no wonder the council want shut of the whole thing! Nothing fancy, elaborate, no double tiered stand, or computerised turnstiles just a basic ground but fully functional. Nowhere near as good as The Shay (or Thrum Hall) but certainly fit for purpose. I remember thinking this is precisely the type of ground the rugby club (at that time was not thinking of the football people) should be at. If we could acquire such a ground with club(s) ownership we would be masters of our own destiny and in a facility that is both affordable and fully usable. One question that results from this train of thought is that why don’t the Council simply sell the Shay Stadium for something approaching it proper market worth to a suitable house builder or supermarket chain etc. Build `us’ a low cost stadium more suitable to the tenants needs (many years ago a site in Copley was mentioned) for a fraction of the cost of that Mr A is offering. The council would be win-win with this deal; council make serious money on the deal, rid themselves of the white elephant that is the Shay Stadium, the Football and Rugby clubs get a new ground with more reasonable running cost and that reflect the current status in their respective sports; everybody happy - job done (PS and Mr A is really interested in helping the club(s) he would want to be involved, wouldn’t he?)