Quote: Chris28 "I've probably missed it, but what is the relationship between the Council and SMC?
Is the SMC in place to run the stadium for the council, like a letting agent? Or is there more to it? Seems odd that the council aren't slapping the SMC down for not managing the stadium fairly, or generating serious income. Why no concerts? Why no big events?
I am perplexed tbh.'"
This sort of explains it:
Footballer earns as much in week as Hull council has got for stadium
Published Date: 15 October 2010
By Rob Waugh
ONE Hull City footballer is paid as much in one week as the local council has received in eight years' lease payments after spending £46m to build the club's new stadium.
And the stark reality for Hull Council is that the deal it signed up to, after handing over the keys to the KC stadium runs for 50 years and is legally watertight.
Anxious to avoid any responsibility for running costs, the council handed control to a private company when the stadium opened in 2002 and agreed to a return based only on a small proportion of any profits made.
The results of the agreement were previously held in private council papers but can now be revealed after the Yorkshire Post obtained a number of internal documents, some provided under the Freedom of Information Act.
A copy of the lease agreed with the Superstadium Management Company (SMC) shows the council receiving a return of 5 per cent of net profits up to £1m, 7.5 per cent up to £1.5m and 10 per cent above £1.5m.
But with profit levels continually low or even non-existent, the total paid in the eight years since the stadium opened is £46,996.20.
Over the same time, Hull City's attendances and fortunes have soared, including promotion to the Premier League in 2008, and Hull FC rugby team have become one of Super League's best-supported clubs.
Returns to the council under the lease have, however, fallen. In the year of City's promotion, the lease delivered just £709 and a season of bumper crowds in the Premier League the following year only brought in £1,038.
The council could have opted to receive a straight rental payment from the teams using the stadium or one based on attendances. A briefing note prepared for the council's scrutiny committee says the closest comparable development is Manchester City's stadium, under which the council there agreed a deal based on gate receipts.
A council spokeswoman said, however, the relatively low status of Hull City and Hull FC nine years ago meant a guaranteed rental based on crowd figures was not considered viable at the time the lease was negotiated.
Terms were agreed by the council's stadium project special sub-committee in 2001 when the authority was Labour-run.
The SMC has been owned by the owners of Hull City throughout. Concern about returns under the lease have prompted councillors on the scrutiny committee to ask officers to examine the accounts and the lease.
But its members were told the deal is watertight and can only be altered by agreement. A briefing note earlier this year reveals the council has been discussing the possibility of developing land nearby which would open up a chance to increase returns.
The negligible return on a £46m asset is questionable enough but the council also agreed to pay the SMC a set annual rent of £72,500 to use office space at the stadium.
A council spokeswoman said it was considered a market rent at the time and the authority does have a break clause in 2012 which it is considering using to terminate the agreement.
