Quote Allams in HDM="Allams in HDM"Now, in the face of a public storm against he and his father,
Mr Allam has claimed talk of Hull FC paying a £600,000-a-year rental charge for using the stadium to be "massively misleading".
We are now obligated to buy in excess of £140,000 worth of passes every year.
"I can't comment on the reasons why that was changed, as it was before our time,
but it guarantees in excess £100,000 of passes at Hull FC every year. That is a direct loss to the SMC."
Mr Allam also revealed a £70,000 loss to the SMC last year for subsidising catering and beer sales at FC,
as well as a cost in excess of £100,000 to cover policing and stewarding at FC games.'"
Maybe I (as an unbiased Hull FC supporter for 55 years) should try to respond.
The viability of a new Stadium in Hull was based on both Hull FC and City becoming long term tenants.
Neither club were financially sound, and Hull FC, like City, negotiated a contract based on their own particlular circumstances.
Lets take catering first:
Hull FC made a reasonable profit. Lots of volunteers and full control. The SMC said, quite understandably, that the SMC would have to
run the catering side of the stadium because there were multiple tenants and it was impractical to do anything else.
The SMC run profit margins based on Hull FC's expected attendances fell well short of Hull FC's own forcasts.
Rental:
The SMC felt that £600000 per year was a reasonable figure. (Very similar, perhaps, pro-rata, to Hull City's.)
Hull FC felt that, based on current attendance figures, this figure was excessive. If attendances fell they would struggle and
this would compromise the whole concept behind the building of the Stadium.
So Hull FC negotiated a "performance related" deal.
To ensure that Hull FC were not financially compromised, £140000 worth of season passes were to be bought by the SMC each year.
Hull FC would be paid £70000 a year instead of taking any catering profits.
The SMC would receive 50% of all income from attendances in excess of 8500.
Now lets do some sums:
This seasons average attendance is as low as it been in a long time, 10500, say.
Lets assume a very low figure of £10 per supporter to attend matches.
(10500-8500)*15 games creates addition income of £300000/2 for the SMC, which pays for the passes with £10000 to spare.
Policing and stewarding costs will have been easily covered in previous seasons, and the figure of £10 might just be a bit low.
The catering subsidy of £70000 doesn't meantion the profits which go to the SMC. If catering is losing money then so is, surely,
Hull City's side of the catering.
Typed in haste - rant over.