But they don’t own the stadium. Something seems a bit bent here. Maybe that’s how football finances work. A mortgage is generally secured against something you will own outright at the end of it.
Bartlett also took out a loan against future seasons Corporate pass sales, as back then corporate memberships were for five years and it was significant guaranteed income.
3. Assignment, Transfer of Shares and Mortgages 3.1 Charge/Mortgage: The lease provides that the tenant may at anytime charge the property to a “respectable and responsible financial institution”. There is no stipulation that the Council’s consent is required, save where such charge is made other than to a “respectable and responsible financial institution”. Where the charge is not to a “respectable and responsible financial institution” Council’s consent is required, however, it is “not to be unreasonably withheld or delayed”. The mortgage of the stadium to RBS in 2007 by the then owner R3 Investments to facilitate the transfer of the club between Adam Pearson and Russell Bartlett accordingly did not require the consent of the Council.
It's effectively just a loan and though these are normally taken out against an asset, they can also be taken out against future income and the SMC has guaranteed rental income from City and FC, but it is rather surprising that the lease terms allowed it.
It is possible the council quotes I have copied here are the minutes or findings of that review carried out on the 12th December 2014
I honestly can’t believe it. If payments had fallen into arrears. Does that mean RBS could have gained possession of the Stadium? Inexperience on the Councils behalf when drawing up the terms of the lease?
The company was purchase for a nominal sum on the basis that the winding petition was settled. I think at the time the stated liabilities of the company were 16m. Bartlett a few months later popped up with a demand for 7m, there were mortgages in the SMC, staged transfer and agents fee to be settled and the club had over 100 leases on company cars. Assam Allam bought the club because he understood that there was nothing in the way of being able to develop Walton Street and because out of the consortium who he was in with, he was the last man standing. Bartlett was a property developer and it was probably his team that suggested that buying the freehold was just a formality. Assam Allam had no interest in the football side of the business and it only entered his plans once he could see that even with the freehold he could not get his money back. At 16m there was a chance for supporters to do a deal. It needed 8m on the table by the October after he bought the club.
As Chazz has mentioned, John Fareham was somewhat scathing about the terms of the lease. I asked him once about something relating to the stadium ownership and lease terms but he would not go into finer details.
This. Does it really matter the price the club was bought / sold for? Whether the Failures are asset stripping or not? And so on, supporters point scoring over each other? Divide and conquer. Whatever. The club, our club, is up **** creek without a paddle right now and heading towards the waterfall.
The Sheffield Mafia pulled a similar stunt at Boothferry Park to get their hands on some readies just before they were kicked ( locked) out of the stadium by David Lloyd. They sold a number of lifetime passes for £1k each which caused considerable headaches for Adam Pearson later on. I think Pearson honoured them for five seasons and then cancelled them which of course led to some supporters thinking they had been robbed.
Well, it depends Do you account for inflation, build in opportunity cost, deduct vat reclaimed, add interest if it was bought with a loan, any tax offsets, ....... Not much is that straightforward. Just saying like .
account for inflation, - no, you think about that when it is relevant build in opportunity cost, - no, money does that deduct vat reclaimed, - if you are VAT registered you should always think net of VAT add interest if it was bought with a loan, - no because you could have bought something else with the loan and paid cash for the car any tax offsets - you could offset them for something else
