pfim
Player Valuation: £50m
Because the council can borrow money at a lower rate than an investor and therefore require a lower rate of return. If they pass the savings onto EFC (which seems to be happening) then that is less cash we need to commit.
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Because the council can borrow money at a lower rate than an investor and therefore require a lower rate of return. If they pass the savings onto EFC (which seems to be happening) then that is less cash we need to commit.
pfim
Player Valuation: £50m
Sure, use their low-rate financing, have them bear all the risk...it's a great idea for the club. I don't really think governments should be in the sports finance business, but that's a much larger discussion (that we continually have in the states).
sheedys left peg
Player Valuation: £25k
We are an asset stripped club. A club of our stature should not be paying rent to anyone for use of their training ground. The fact we get a better rate from the Council as opposed to some private company is no comfort to me whatsoever.
Blue Lou
Player Valuation: £750k
I find it odd how happened last month (10 May 2013) and nobody said anything.
We had an EFCSA meeting and it wasn't mentioned (though minutes say Paul Tyrrell was present and Echo reported he left after the West Ham game, Echo were wrong)
Badge announcement
Pre-season tour announcement
Second badge announcement - to announce it'll only be used for one year
Martinez appointment including press conference
and not once did anyone say anything about the training ground being bought by the city council and reducing rent. Something is iffy. It seems people only bothered to report it (club and council included) once ToffeeWeb published irrefutable proof it was owned by the Council.
Also not sure why NSNO are reporting that LCC are charging Everton c. £500k a year in rent, to do so the Council would have had to borrow at a rate less than 0.001% to be able to charge Everton that and cover their own buy-to-let mortgage's costs.
We had an EFCSA meeting and it wasn't mentioned (though minutes say Paul Tyrrell was present and Echo reported he left after the West Ham game, Echo were wrong)
Badge announcement
Pre-season tour announcement
Second badge announcement - to announce it'll only be used for one year
Martinez appointment including press conference
and not once did anyone say anything about the training ground being bought by the city council and reducing rent. Something is iffy. It seems people only bothered to report it (club and council included) once ToffeeWeb published irrefutable proof it was owned by the Council.
Also not sure why NSNO are reporting that LCC are charging Everton c. £500k a year in rent, to do so the Council would have had to borrow at a rate less than 0.001% to be able to charge Everton that and cover their own buy-to-let mortgage's costs.
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Dell Boy
Player Valuation: £35m
I don't see it as that big a deal that someone has bought the freehold - the investment was sold but the club have every right and protection afforded to them by their long lease.
It becomes more interesting that it's LCC rather than some faceless investment house.
On your last comment - how do you know what LCC's cost of borrowing is? Most Councils have a large surplus so technically the cash could be spun into this only requiring the 'opportunity cost' to be booked. I agree that's a bit slapdash but Councils do that on other deals I'm aware of.
peteblue
Welcome back Wayne
It really doesn't matter. If we own it we have to pay tax on the asset, if we rent it the rent is offset against profit. What matters is that we have the best financial outcome. The club will have done the sums.......
Foot Long Hot Dog
Player Valuation: A packet of pork scratchings
How do you work that out mate?
Foot Long Hot Dog
Player Valuation: A packet of pork scratchings
People keep quoting this line, but the only asset that's been liquidated is Bellefield.
Steve Wigan
Player Valuation: £35m
True. But there are some people(you know who you are) who are so obsessed with finding even the smallest stick with which to beat the club(aka, in their minds Mr. Bill Kenwright), that they will always attempt to turn a minor positive into a major negative, and will see 'conspiracy' in everything. The club have got a good(that is, better) deal out of this...and local authorities all over the country invest in property, not always in their own locality. Its not unusual, at all. The council were given an opportunity, and took it. Good on them.
Ihaters
Player Valuation: £35m
Yes, makes perfect sense to me, if we didn't do it this way, and we had 12-15 mil less in terms of finances, we would of lost out transfers... No Baines and Jags and finishing further down the league, missing out on the league placings and finance that provides is just as detrimental as paying high annual prices for the lease of something we can buy back.
Steve Wigan
Player Valuation: £35m
The point about the very common business practice of Sell and Lease back is that it frees up capital for use in other ways. Its done all the time by major companies(HSBC branches, department stores, factories etc.) and by other football clubs as well. Getting the cost of building back we had that money to spend on the thing that supporters always crave for, more players.
Blue Lou
Player Valuation: £750k
With a few presumptions:
Joe Anderson was on the radio yesterday saying that the deal is self-sustainable and will pay for itself and that it's not costing the Council money, but making a profit for them. Essentially, what's happening is the council are borrowing at a lower rate than they are charging Everton, but it's still at a lower rate than what Everton were previously paying. He described it in the Echo as "win-win".
The council released a statement to the BBC North West Tonight saying that the deal would be of the benefit "tens of millions" i.e. at least 20 million profit .
1% mortgage over the course of 25 years would cost £14.7m to pay back
2% ... £16.6m
3% ....£18.6m
It's more likely the case that council are paying 3% and have reduced Everton's annual rent by £500k, leaving the council with £250k profit per year. After 25 years of £250k (£6.25m) and 19 years of no mortgage costs at same rate (£19m) making the council a profit of £25.25m over the term of the lease) Not adjusting for increases etc. it makes sense.
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Foot Long Hot Dog
Player Valuation: A packet of pork scratchings
More likely is that the council are using cash reserves & that the real payment is circa £1m per annum, saving the club circa £400k & giving the council a circa 8% return on capital employed, on a safe investment, that's an appreciating asset.
efc1111
Player Valuation: £500k
Those are the lines I was thinking along too. If so, it's a sensible deal all round, but you wonder why it wasn't announced earlier.
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