if it's running up that kind of debt then presumably he'd expect the council and the public to give him the stadium
The council can cancel the lease if they wanted to. They haven't the balls to do that though. Hull City AFC would be £13 million worse off, but the SMC is never going to be in a position to pay it without also paying millions of pounds to the City Council. Something the Allams would never do. Hull City AFC would be better off getting rid of the SMC and negotiating a new rent with Hull City Council for use of the KCOM.
I suspect its Hull City's money loaned to the SMC via Allam House, they wouldn't loose anything but Hull City would. They're far too smart with regards to the law (or their legal team is) to breach the contract, so there's little chance of the lease getting cancelled.
I would guess it's part of an exit strategy. Once they've got their money back, they can put the SMC into administration (stop supporting it). They won't care if the council locks them out of the stadium. They can keep paying the rent personally (% of income from attendances above 8k - or whatever it is - will be nil). Probably some kind of revenge scheme for their own poor due diligence when they bought the club (and if you believe an account buying a club is going to miss a multi-million pound liability then good luck to you).
The council can't cancel the lease without grounds and you can be sure the Allams have checked what every one of the lease clauses are. Under AP, the turnover of the SMC was tiny the total rental income was only about £300k, it only make massive losses now because the Allams want it to, they didn't need to run up the losses or debt that they have. With the SMC being owned by the same organisation that owns City and the lease terms not requiring anything to be paid to the council, it's the perfect deal for the owner, as he can just set his own rent. Only when you start playing silly buggers with the accounts that the numbers start to look bad. Run properly, you'd never consider going back to the council to negotiate a new rent, as currently no rent is payable at all.
The Council have grounds to cancel the lease but until they do its a sterile argument. Maybe the Allams are spending money hand over fist to avoid paying anything to the council. Alternatively they are paying a fortune to comply with the Premier League Rules whilst maintaining an aging stadium with no warranties. I suspect its a bit of both. Hull City AFC pay around £4 or £5 million a year to rent the stadium. They also loan the company over £1 million a year to fund the losses. Hull City AFC should be able to negotiate a rent significantly less than that with Hull City Council being responsible for maintaining their own property.
----------- And me for sure 100% And I was behind them loads When I had some treatment at castle hill queens centre I even told radiotherapist I sure as **** wasn't going on any machine the Allams had provided I was more wrong and more stupid then most Doh
If I buy a car and lease it to my company at £500 a week, I'd personally make loads of money and it would cost the company loads of money. There's no need for that car to cost £500 a week, it's not worth it and I could get it cheaper elsewhere, but I could do it because I own the car and I own the company. Hull City AFC only pay £4-5m in rent, because the Allams have decided that's what rent to charge themselves, when they took over, the SMC's total rental income was only £1.6m (2010 accounts).
Do you know for a fact that's what they are doing? Maybe you should have a word with Hull City Council about the Allams ripping off the Council Tax payers of Hull. Given the events of the past few weeks they may well be interested in what you have to say.
I don't know it for a fact, but if the rental income more than triples immediately after a new owner comes in, then it's more than a little likely. They're not ripping off Council Tax payers of Hull, rent is only payable when the SMC makes a profit and it never has and never will (at least not of any significance), whatever inter-company charges are made are entirely at the discretion of the owner of both companies.
Kev Shoesmith @hdm_shoesmith Assem Allam tells me tenant rights will stop council taking action re signs. Is he wise calling council's bluff?
I thought stadium rental costs were defined for both City and FC in the lease ? i.e. % of revenue over and above certain gate money ?
Is he wise calling the councils bluff? Frig me. Wtf does anyone think they'll do? Oh I mean other than have little rants online, or in the HDM. Lemme make a premonition. They'll do what they always do. **** all.
It is quite amusing. 'It must have been the pirates' was pretty good, made me chuckle. Shame the whole episode hasn't played out like this.
There's not much difference between the income and expenditure under the Allams and when Bartlett owned it. You implied they were overcharging for certain service, the example you gave was the rental for your car, in order to turn profits into losses. if that isn't ripping off the Council Tax payers of Hull then I don't know what is.
The SMC has a lease, the football and rugby clubs just pay rent to the SMC, from which the council gets nothing.
I'll ask again....what grounds have they council got for cancelling the lease and now also how are the tax payers of hull being ripped off?
What I meant is that i thought the rent the clubs pay to the SMC (which will be most of its revenue) is actually laid down in the lease ? Anyway, this is the problem when you have a private company running a community asset - there's no transparency. We have to rely on scant public accounts for information.
They can put whatever costs they like through the SMC, all the costs of meeting Premier League requirements were put through, floodlights, new media centre etc, These were all football costs, for which the Premier League paid us handsomely, but the costs weren't paid by the club, they were paid by the SMC who couldn't afford them. It's not bent to run the SMC at a loss/break-even, pretty much any business in the same situation would do exactly the same.
