Crawford Rae, Cappielow and MCT

[SpoonTon]

16 minutes ago, piehutt said:

I can tell you that on a purely economical point, Houses being there are far far better than Morton being there.

And anyway, we are getting way ahead of ourselves here. 

The propsoal is for MCT to take over the club, debt free in exchange for the land which will be rented back at a peppercorn rent. 

We haven't seen the terms of the lease yet, and already people are dead against it. 

Ultimately no opponents of this have a solution except Rae / GC effectively donates £2.6 million to MCT. 

 

A credible buyer would have to pay down the debt (£2.6 million in the 2019 accounts). If they weren't prepared to do that, they wouldn't be credible. 

 

For me, you're making a tremendous argument against what you think you are, btw. 

How long before the ground and land are sold from under Morton's feet after MCT take control of the club?

 

[vikingTON]

23 minutes ago, piehutt said:

I can tell you that on a purely economical point, Houses being there are far far better than Morton being there.

And anyway, we are getting way ahead of ourselves here. 

The propsoal is for MCT to take over the club, debt free in exchange for the land which will be rented back at a peppercorn rent. 

We haven't seen the terms of the lease yet, and already people are dead against it. 

Ultimately no opponents of this have a solution except Rae / GC effectively donates £2.6 million to MCT. 

Erm no, you're actually misunderstanding what is being discussed here. Next to nobody has said that they're 'dead against' the deal made earlier in this year and of course MCT have to negotiate with a realistic understanding of what is possible. 

What people are 'dead against' is contributing extra capital to the club for the remainder of the 2020/21 season without MCT getting anything substantial in return for that extra investment. A no strings attached hauner to let the Raes wash their hands of the club with a clear conscience isn't happening, given the systematic mismanagement under their watch that led to last week's embarrassing display. They had that chance to leave on their terms and have fucked it up. If they want extra backing then they should be willing to make worthwhile concessions. 

[piehutt]

55 minutes ago, SpoonTon said:

For me, you're making a tremendous argument against what you think you are, btw. 

How long before the ground and land are sold from under Morton's feet after MCT take control of the club?

 

 

Depends on the terms of the lease WHICH WE HAVEN'T SEEN. 

 

If MCT got the club debt free, a 10 year lease and 1st refusal to buy Cappielow at the current value plus interest... that wouldn't be a terrible deal. 

Gives MCT 10 years to find their feet and a known outcome they are in control of to raise funds or find an alternative solution. 

 

Taking over Morton with £2.6 million owed to GC is worse imo and you'd be a recession away from Golden Casket having to recover money and possibly pushing Morton into administration. 

 

[Nornirontons]

I think with all the good will in the word to get the ground in the MCT deal I just cant see how this would be viable under the current takeover structure.

Please correct me if I'm wrong:

The whole premise and proposal to date any MCT takeover has been budgeted with the soul aim of taking over the football side of the business. Cappielow as part of the deal was at a very early stage was ruled out of MCTs bid.

It would be fantastic for this to change but what I cant fathom is how people think MTC would be able to switch the lights on in the place never mind afford the rates and upkeep of the place without a massive injection of money from other sources. At this juncture from where I'm looking the ground would be like a noose around MCTs neck.

We'd most definitely be looking at part-time football and a significant stay in the seaside leagues if it was to come to pass as things stand.

I spoke to a local business man a number of years ago who told me he was part of a consortium of businesses who approached Douglas Rae to invest in the club but at the time was told their money was not wanted. At this time its guys like those who we really need if we want a full belt and braces takeover as without a huge injection into MCT all the jumping up and down anyone wants t fill their boots doing really isn't going to make any tangible difference at all to MCTs proposal as it stands.

[TRVMP]

14 minutes ago, Nornirontons said:

I think with all the good will in the word to get the ground in the MCT deal I just cant see how this would be viable under the current takeover structure.

Please correct me if I'm wrong:

The whole premise and proposal to date any MCT takeover has been budgeted with the soul aim of taking over the football side of the business. Cappielow as part of the deal was at a very early stage was ruled out of MCTs bid.

It would be fantastic for this to change but what I cant fathom is how people think MTC would be able to switch the lights on in the place never mind afford the rates and upkeep of the place without a massive injection of money from other sources. At this juncture from where I'm looking the ground would be like a noose around MCTs neck.

We'd most definitely be looking at part-time football and a significant stay in the seaside leagues if it was to come to pass as things stand.

I spoke to a local business man a number of years ago who told me he was part of a consortium of businesses who approached Douglas Rae to invest in the club but at the time was told their money was not wanted. At this time its guys like those who we really need if we want a full belt and braces takeover as without a huge injection into MCT all the jumping up and down anyone wants t fill their boots doing really isn't going to make any tangible difference at all to MCTs proposal as it stands.

Under what is currently mooted, MCT is on the hook for the upkeep and repair. See here:

MCT Questions and Answers – Morton Club Together

Quote

The current budget for the club contains a sum for annual maintenance. We anticipate that the club will be able to continue to pay this from the budget. As indicated above, the general maintenance of the ground will be the responsibility of MCT as club owners. The cost of upgrades is more difficult to explain. Depending on the nature of the upgrades, and the terms of the final lease, they may fall to be paid by the landlord, the tenant, or a combination of both. Once the lease terms are finalised, we will publish it. It will be a commercial lease which will be registered as normal, and will be available to view. If the club wishes to upgrade the stadium and the landlord does not agree to pay, the tenant can, if the landlord agrees, carry out and pay for the upgrades themselves.

In other words MCT (as Morton owners) have all of the responsibility for upkeep while owning zero equity in the land.

[Cet Homme Charmant]

4 hours ago, vikingTON said:

It's not going to be on the open market as commercial land though. A change of purpose would first have to be approved by the second most parochial local council in the country*, and near the top of the mountain of concerns/objections will be 'what happens to the area's only professional football club that currently uses the land?' That's a significant obstacle that would be reflected in any valuation by a potential buyer.

That low current valuation could work against us though, as it might tempt a speculative property developer to take gamble in the hope that if Cappielow lies derelict for years, the council may then be  left with no viable alternative but to redefine the land as commercial, industrial and/or residential. Which would of course overnight increase it's value several times over. It's unlikely the Council would keep derelict land designated as recreational indefinitely, especially if interested parties that could bring investment and jobs to the town were to lobby them.

We need to remember that the fate of Cappielow lies entirely in the hands of the GC board. There may well be good-will on their part out of respect for the memory of Dougie, but will that still be the case in 5 or 10 years? Who knows. The obvious concern in the above scenario is that if such a speculative developer were to make GC an offer for Cappielow based on the current deflated value, the business conditions at the time may be such that the GC board would feel compelled to accept it.

[piehutt]

54 minutes ago, Nornirontons said:

I think with all the good will in the word to get the ground in the MCT deal I just cant see how this would be viable under the current takeover structure.

Please correct me if I'm wrong:

The whole premise and proposal to date any MCT takeover has been budgeted with the soul aim of taking over the football side of the business. Cappielow as part of the deal was at a very early stage was ruled out of MCTs bid.

It would be fantastic for this to change but what I cant fathom is how people think MTC would be able to switch the lights on in the place never mind afford the rates and upkeep of the place without a massive injection of money from other sources. At this juncture from where I'm looking the ground would be like a noose around MCTs neck.

We'd most definitely be looking at part-time football and a significant stay in the seaside leagues if it was to come to pass as things stand.

I spoke to a local business man a number of years ago who told me he was part of a consortium of businesses who approached Douglas Rae to invest in the club but at the time was told their money was not wanted. At this time its guys like those who we really need if we want a full belt and braces takeover as without a huge injection into MCT all the jumping up and down anyone wants t fill their boots doing really isn't going to make any tangible difference at all to MCTs proposal as it stands.

 

Prior to the Scott era, Morton was owned in this way. A number of local businessmen would have shares and sit on the board etc. Obviously in those days clubs could just about break even with decent gate receipts and selling on of players, so these directors weren't on the hook to bail out the club every year just to keep the lights on. 

 

I think ultimately Dougie was reluctant to take on the club when he did, but clearly was the only show in town & didn't want to see the club die. Once he got in (and wrote the cheque) it was his show and he didn't want to have to include others in his decision making. Hence turning away reasonable offers of investment and effectively sidelining the GMST who were on the board for a time and could have been coached into a viable purchasing vehicle. Or at least to invest more into the club. 

 

Crawford clearly doesn't have the same passion or desire to basically plough his family fortune (who knows how vast that is) or his personal time any more into this and it's been obvious he's wanted out for a while.

 

But I genuinely believe he wants to ensure the club is passed on to those with the best interests of the club at heart. If he didn't care about the club, we'd never have gotten anywhere near where we are and who know who might have gotten control of things.

 

But money is money and I think it is unlikely he is just going to give up £2m to £3m to MCT.  

 

 

 

 

[TRVMP]

10 minutes ago, Cet Homme Charmant said:

Of course the concern in the above is that if such a developer were to take such a gamble and make GC an offer, then there may be business circumstances where the GC board may feel compelled to accept it.

This is the crux of it. Let's assume good faith and indeed affinity for Morton from the GC board, for ever and ever. (It's a dangerous assumption to make, but let's go with it.) Let's also assume that first and foremost, they care more about Golden Casket's core business. They may love their plucky local football club, but they love keeping the lights on more. If there's more lockdowns and trading conditions are bad for physical retail, and cash is tight, and someone comes in with a big offer, and they have a choice between selling it or laying people off and closing Fort Matilda... they'd be crazy not to sell Cappielow.

[Nornirontons]

Thanks TRMVP.

It does appear that there are very much offer and counter offers to be made. Is it wrong to assume GC would be throwing the rates bill in?

 This on its own would be a significant chunk of money for MCT to come up with before spending a pound on anything else...or is it envisaged this would be part of any peppercorn rent scheme?

Be interested to find that 1 out

 

[piehutt]

4 minutes ago, Nornirontons said:

Thanks TRMVP.

It does appear that there are very much offer and counter offers to be made. Is it wrong to assume GC would be throwing the rates bill in?

 This on its own would be a significant chunk of money for MCT to come up with before spending a pound on anything else...or is it envisaged this would be part of any peppercorn rent scheme?

Be interested to find that 1 out

 

From what I've seen from MCT I believe MCT / Morton will have to fund all of the costs of running the club, in terms of keeping the lights on, maintaining the stadium, paying staff, accountants, insurances etc etc. 

This will be in the terms of the lease. 

Golden Casket will go from majority shareholder to owner of the land with a lease in place between GC and Morton which will eliminate the £2.6 million of debt on the Morton balance sheet. 

[Cet Homme Charmant]

19 minutes ago, TRVMP said:

This is the crux of it. Let's assume good faith and indeed affinity for Morton from the GC board, for ever and ever. (It's a dangerous assumption to make, but let's go with it.) Let's also assume that first and foremost, they care more about Golden Casket's core business. They may love their plucky local football club, but they love keeping the lights on more. If there's more lockdowns and trading conditions are bad for physical retail, and cash is tight, and someone comes in with a big offer, and they have a choice between selling it or laying people off and closing Fort Matilda... they'd be crazy not to sell Cappielow.

The thing is though, with it's current deflated value because of the land designation, they would even have to put in a 'big offer', they'd get it for relative pea-nuts in the hope of making a killing further down the road. 

[vikingTON]

3 hours ago, Cet Homme Charmant said:

That low current valuation could work against us though, as it might tempt a speculative property developer to take gamble in the hope that if Cappielow lies derelict for years, the council may then be  left with no viable alternative but to redefine the land as commercial, industrial and/or residential. Which would of course overnight increase it's value several times over. It's unlikely the Council would keep derelict land designated as recreational indefinitely, especially if interested parties that could bring investment and jobs to the town were to lobby them.

Except that as the Raes have already told us ad nauseam, they have had the club on the market with the prime redevelopment land attached to it for years and couldn't find a buyer because we're so tinpot and shite that only GC's boundless generosity can keep us going. It's almost as if property developers aren't actually queuing up to go through the rigmarole of transforming a football ground into commercial land against the wishes of the professional club using it, when there are already enormous stacks of derelict/underused brownfield all over the Inverclyde area that pose no such difficulties. They could make a profit eventually from the land at Cappielow but the opportunity costs in doing so are enormous. 

[vikingTON]

5 hours ago, piehutt said:

 

Depends on the terms of the lease WHICH WE HAVEN'T SEEN. 

 

If MCT got the club debt free, a 10 year lease and 1st refusal to buy Cappielow at the current value plus interest... that wouldn't be a terrible deal. 

Gives MCT 10 years to find their feet and a known outcome they are in control of to raise funds or find an alternative solution. 

 

Taking over Morton with £2.6 million owed to GC is worse imo and you'd be a recession away from Golden Casket having to recover money and possibly pushing Morton into administration. 

As opposed to right now of course where there is a recession and a pandemic so Crawford and the gang put out the begging bowl asking for fans to fill a hole in the budget that they were responsible for, while GC contributes seemingly hee-haw. Which brings us nicely back to the current cause of the crisis which I don't think that you've actually addressed before going off on one about the terms of a future lease.

1) What should be done to resolve the current financial shortfall for the season?

2) Who should cough up any additional money for this?

3) What should they receive in return for that capital investment?

[Cet Homme Charmant]

3 hours ago, vikingTON said:

Except that as the Raes have already told us ad nauseam, they have had the club on the market with the prime redevelopment land attached to it for years and couldn't find a buyer because we're so tinpot and shite that only GC's boundless generosity can keep us going. It's almost as if property developers aren't actually queuing up to go through the rigmarole of transforming a football ground into commercial land against the wishes of the professional club using it, when there are already enormous stacks of derelict/underused brownfield all over the Inverclyde area that pose no such difficulties. They could make a profit eventually from the land at Cappielow but the opportunity costs in doing so are enormous. 

The other vacant brownfield sites you're referring to presumably aren't designated solely for recreational use, and if so will be considerably more expensive per square metre than the land Cappielow sits on. If a potential developer could get that land at a fraction on the price and were willing to sit on it until the council changed its designated use, they could make a killing. So yeah, it would be a speculative purchase, but not a high risk one I don't think, for the reasons I mentioned. And the only thing that would stop it from happening is the good-will of the GC board, but if push came to shove and they needed to sell to bolster their cash-flow, they'd be mad not sell. I'm pretty sure the GC board will be far less benevolent and sympathetic to GMFC than Dougie or even Crawford were. Their legal duty, first and foremost, is to protect the interests of GC shareholders, not GMFC.

[vikingTON]

'Being willing to sit on it' is not the M.O. of property developers. The whole point is to realise a profit as quickly as possible so that you can then reinvest that money on buying another piece of land to develop that and so on. Meanwhile your competitors are still sending their latest plans down to Inverclyde Council to see what Stephen fucking McCabe thinks about things, before then trying to run a football club quite literally out of town.

And that is why people are not queuing round the block to snap up this land. It might look like a single great profit on paper but you can flip equivalent areas multiple times over to realise a larger total profit with absolutely none of the hassle. As Brabco have found to their cost in attempting to empty Dumbarton from their bus shelter to a new ground and use the land for housing in a non-hostile takeover. It took them four years for their plan to get  kicked out by the council and two years later they're sitting on a club that they don't want to run just like Golden Casket and still haven't made forward progress. Shifting Cappielow would be a much harder task.

[HamCam]

15 minutes ago, Cet Homme Charmant said:

The other vacant brownfield sites you're referring to are presumably aren't designated for recreational use, and if so will be considerably more expensive per square metre than the land Cappielow sits on. If a potential developer could get that land at a fraction on the price and were willing to sit on it until the council changed its designated use, they could make a killing. So yeah, it would be a speculative purchase, but not a high risk one I don't think, for the reasons I mentioned. And the only thing that would stop it from happening is the good-will of the GC board, but if push came to shove and they needed to sale to bolster their cash-flow, they'd be mad not sell. I'm pretty sure the GC board will be far less benevolent and sympathetic to GMFC than Dougie or even Crawford were. Their legal duty, first and foremost, is to protect the interests of GC shareholders, not GMFC.

Unless GC were in a 'distressed' state why would they sell off Cappielow "at a fraction on the price" and even if they did surely MCT are the most likely purchaser?

[Cet Homme Charmant]

5 minutes ago, vikingTON said:

'Being willing to sit on it' is not the M.O. of property developers.  

It's exactly the M.O. of speculative property developers.

[Cet Homme Charmant]

10 minutes ago, HamCam said:

Unless GC were in a 'distressed' state why would they sell off Cappielow "at a fraction on the price" and even if they did surely MCT are the most likely purchaser?

It's a fraction of the price of a similar sized piece of land that isn't designated solely for recreational use. So if they sell it would be at the deflated valuation because it would take time before the land could be developed. If MCT could match any offer, perhaps they'd get first refusal, but even with its current designated use I guess its valuation would still be way beyond the means of MCT.

[vikingTON]

9 minutes ago, Cet Homme Charmant said:

It's exactly the M.O. of speculative property developers.

Yep, that'll be why Brabco directors are just delighted to be still fielding phone calls from Jim Duffy trying to get a new Dutch ringer trialist through the door, rather than looking back on a job well done and never having to set foot in or deign to mention a monumental dump like 'Dumbarton' again in their lives. It's all part of their long game strategy and not just a total fuck-up. 

[capitanus]

9 hours ago, piehutt said:

That's an unknown. In the corporate world, if Rae wanted out GC could force administration and the club put up for sale and / or asset stripped with money raised paying the £2.6 million debt in the Morton balance sheet (I assume almost wholly due to GC). 

Cappielow and the car park is a huge site so it's naïve to think it wouldn't raise a decent price on the open market. Hell no doubt GC could just take the asset and not even worry about trying to sell it on the open market (which is effectively what is happening in the MCT deal). 

I believe Dougie effectively paid £450k for the land in the original deal to get Scott out of the picture, but that area of town has been transformed beyond all recognition with a thriving development along the A78 from the Port Town into Greenock. 

There are plenty of investment funds / property speculators and housing companies who would be interested in a site without planning permission or zoned for recreation and be prepared to sit on land for a decade or more until development was permitted.

the Love Street site has barely been developed despite St Mirren getting £15 million for that in 2007!

To think such a site in Greenock wouldn't be worth £3 to £5 million is just wrong.