Oxford United must pay more for stadium (From The Oxford Times)
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Oxford United must pay more for stadium
9:40am Thursday 5th July 2012 in Sport
Oxford United expect to pay an increase of up to £100,000 a year for the service charge they pay to their landlords at the Kassam Stadium.
Last November, the U’s settled a dispute with Firoz Kassam’s company Firoka Ltd for additional charges relating to four years up to last summer.
The one-off payment of £298,000 put the latest club’s accounts, for the year to June 2011, into the red as they recorded a loss of £296,000.
And chairman Kelvin Thomas revealed at the AGM the club would be paying higher rates from now on – although it is unclear whether it would be affected by the ground-share with London Welsh.
He said: “There will be an estimated £75-100k increase per year moving forward, but this will be absorbed into the profit and loss rather than being treated as a exceptional item.
“The club is disappointed with the effect on the financials for the year, but is pleased the matter is resolved.”
Thomas was encouraged by the rest of the figures, with the U’s increasing turnover by 24 per cent, from £2.6m to £3.2m.
It meant they had an operating profit of £10,000, compared to a £91,000 loss for the previous year, while £175,000 of external debt was also repaid.
Meanwhile, United have broken their silence over the ground-share with London Welsh.
When chairman Kelvin Thomas was questioned about the matter at the club’s annual general meeting, he said: “We have been in dialogue with London Welsh, but will not know full details until we sit down with them next week.
“We can’t really say much more about the advantages and disadvantages until we know full details.”
Comments(26)
EMBOX1
says...
1:03pm Thu 5 Jul 12
karatavuk wrote:Yep, OUFC need to find a way of buying the stadium (be that via a local high net-worth invididual buying it, and leasing back to the club, or other means).
Kassam continues to bleed the club dry.
More money in his pocket and he can make more out of London Welsh.
HopefulOx
says...
1:06pm Thu 5 Jul 12
Joe1
says...
1:18pm Thu 5 Jul 12
FOR THE SAKE OF OUR CLUB GET OUT OR BUY THE STADIUM.
johnnylyle
says...
3:37pm Thu 5 Jul 12
My simple maths tells me that if we are now paying £400k per year then if we could get someone else to build a ground for us for anywhere less than £5.7m - £8m the rent would be cheaper.
Sadly, I think the cost for building a new ground would/could be far higher than this so Kassam is only charging commercial rent.
As a fan of well over 40 years though he is certainly not doing us any great favours with the totally commercial deal we are getting - particularly with how much he cost us over the years.
The London Welsh deal is an interesting one too. If we are allowed under our lease to sub-let, then we could keep all the rent we draw from them.
northampton yellow
says...
3:39pm Thu 5 Jul 12
johnnylyle
says...
3:43pm Thu 5 Jul 12
The difference between a stadium and almost any other building is that it has little alternative use. Without a footballing tenant, it has no value.
But we couldn't threaten unless we had somewhere else to go!
OxRoxBox
says...
5:09pm Thu 5 Jul 12
mandate
says...
6:20pm Thu 5 Jul 12
Supposing the club continues to rent the stadium for 15 more years, they will have effectively paid the cost of the stadium. This still leaves them as tenants and not owners.
Naturally, the big winner is Firoza (Kassam). He will have managed to have regained his cost for the stadium, and at the same time made lots of extra money from catering and functions.
It would be better for OUFC to sit down with the board members of London Welsh, and together discuss the possibilty of building a new stadium.
If a new four sided stadium with a 10-12,000 capacity was built at a cost of £18 million pounds, the club(s) would be repaying together approx 800k per year, on a 30 year loan.
This would be 300k more than what they are already paying to rent the stadium, but they would then have sole control of the profits made from catering and functions at the ground. They would have to make profits of approx. £5,000 per game on catering to cover the extra revenue needed to cover the stadium loan.
Alternatively, financing of a new stadium could be partly funded by offering sponsorship deals to companies to name the ground or stands after themselves. Let's just imagine that BMW were interested, the stadium or one of the stands could be named after them if they were prepared to help finance the ground. I'm certin that both London Welsh and Oxford United have good marketing potential.
The Kassam deal for me is a complete rip-off. We should not be paying so much money for a 3 sided ground. Oxford United and London Welsh should at the very least make Kassam build the 4th stand.
BenkiuGuasu
says...
6:22pm Thu 5 Jul 12
So, could we maybe move out? Where to? We struggled for years to find a location last time round - it isn't an easy one at all.
Perhaps we could join forces with Oxford City, and rebuild the stadium. They certainly have a plot of land big enough. I know it's not ideal and has its disadvantages like traffic and whatnot... But it's an idea.... A ground with soul....oh for a ground with soul....
Stayed at the manor...we shoulda stayed at the manor....stayed at the maaaanoooorrrr......
. and such and so....
johnnylyle
says...
6:39pm Thu 5 Jul 12
mandate wrote:I think you're right. A ground share would make the figure great value for us too. Mr Branson, would you like to lend the club £18mill on a no interest 30 year loan?
It makes no sense to rent the stadium for 500K per year. This is just draining the club's finances.
Supposing the club continues to rent the stadium for 15 more years, they will have effectively paid the cost of the stadium. This still leaves them as tenants and not owners.
Naturally, the big winner is Firoza (Kassam). He will have managed to have regained his cost for the stadium, and at the same time made lots of extra money from catering and functions.
It would be better for OUFC to sit down with the board members of London Welsh, and together discuss the possibilty of building a new stadium.
If a new four sided stadium with a 10-12,000 capacity was built at a cost of £18 million pounds, the club(s) would be repaying together approx 800k per year, on a 30 year loan.
This would be 300k more than what they are already paying to rent the stadium, but they would then have sole control of the profits made from catering and functions at the ground. They would have to make profits of approx. £5,000 per game on catering to cover the extra revenue needed to cover the stadium loan.
Alternatively, financing of a new stadium could be partly funded by offering sponsorship deals to companies to name the ground or stands after themselves. Let's just imagine that BMW were interested, the stadium or one of the stands could be named after them if they were prepared to help finance the ground. I'm certin that both London Welsh and Oxford United have good marketing potential.
The Kassam deal for me is a complete rip-off. We should not be paying so much money for a 3 sided ground. Oxford United and London Welsh should at the very least make Kassam build the 4th stand.
And I also agree with BenkiuGuasu, there has never been any Soul at the Kassam, because it is designed to be built as cheaply and efficiently as possible so the atmosphere just blows right through the ground.
make mine a double
says...
8:25pm Thu 5 Jul 12
MadMan-JaYmZ
says...
9:05pm Thu 5 Jul 12
Cheap ****, oxford need to get out that stadium or get a better deal !
manorforever
says...
10:18pm Thu 5 Jul 12
!
camden
says...
10:11am Fri 6 Jul 12
Oxford United have four options
1. Terminate the agreement with Kassam and rent somewhere else. (Oxford City, Wycombe Wanderers, Didcot Town etc).
2. Terminate the agreement with Kassam and seek to find new investment/owners to finance and build a new stadium.
3. Stay where they are, continuing to pay rental to kassam whilst seeking new investment/owners with the finances to purchase and COMPLETE the stadium.
4.Stay where they are, continuing to pay rental to kassam and nothing else.
the wizard
says...
10:41am Fri 6 Jul 12
Time for re negotiation of rent don't you think ? and then look for somewhere else anyway.
Joe1
says...
11:30am Fri 6 Jul 12
winger whitley
says...
12:54pm Fri 6 Jul 12
maximillion6665
says...
4:20pm Fri 6 Jul 12
There must be a good reason for choosing to keep paying this rediculous rent, but why?
yellowhoods
says...
7:40pm Fri 6 Jul 12
stephen burrows
says...
8:47pm Fri 6 Jul 12
Simon84
says...
9:45pm Fri 6 Jul 12
Can you really blame Kassam for doing what he is doing he got two idiots (Lenagan & Merry) to sign a one sided lease is that so wrong?
Yes we can blame Kassam all we want but the people who are really to blame are Lenagan and Merry they got us into this mess and are not prepared or in a position to sort it.
mandate
says...
12:42pm Sat 7 Jul 12
The 'Bransom' stadium would be a great legacy to him (better than a statue). He could even purchase it for his daughter and name it the Holly Branson stadium.
So, if you're interested in making the loyal fans at Oxford extremely happy, please take us onboard sir Richard. There would probably even be a few quid in it for you, if you were take on this new business venture.
mandate
says...
1:11pm Sat 7 Jul 12
Here is a free business and marketing strategy plan for you Richard.
Virgin Airlines establish new flight routes from Oxford -London Airport. At the same time you promote this new venture by buying out Lenegans share at Oxford United.
You then buy and rename the Kassam stadium to the Virgin or Branson stadium. You give Oxford United and London Welsh a major sponsorship deal, wherby they both proudly promote your brandname at the stadium and on their shirts.
This would neatly tie up the fact that you now fly from Oxford-London Airport, because you are promoting OXFORD United and LONDON Welsh.
mattyproper77
says...
4:22pm Sun 8 Jul 12
It looks like some open, transparent assessment of the financial viability of the various options open to OUFC should be made.
Obviously have to use the head not the heart, but it would feel so, so sweet to walk away from that albatross stadium and basically start again.
OUFC is in our hearts, it will always exist, so it doesn't matter where we play or where we 'start again' from.
I also don't think FK can be blamed too much, he is spiritually sick and feels absolutely no connection to his fellow man, he is under the delusion that ££££ will make him happy (and seeing as he came from poverty, this is perhaps unsurprising). This whole tragedy is partly of our making, and stretches back to the mid-1980s at least.
Whatever happened to Robin Herd?
Andrew:Oxford
says...
11:06pm Sun 8 Jul 12
Rebuild Water Eaton Park & Ride as a multi-storey car-park with more spaces than there are currently.
Build a new Stadium at Water Eaton with one of the stands backing onto the derelict grain-store in a sympathetic and aesthetically pleasing manner.
This would mean a new stadium, with a railway station on the national network, bringing a heritage property back up to standard for an alternative use and more effective use of parking spaces with games tending to be held when commuter use of Water Eaton P&R is at a minimum.
Should also be better for corporate events too!
Just off M40, 1000s of parking spaces, (hopefully) direct access by fast train from London, Milton Keynes, Oxford, Reading.
Football itself is a tiny proportion of an income from this kind of asset.
karatavuk says...
11:30am Thu 5 Jul 12
More money in his pocket and he can make more out of London Welsh.