125 year lease- impact on a takeover?

[Mr Popodopolous]

I know it was mentioned in the main thread but does this deserve a thread of its own.

On one hand, security of tenure is all well and good but otoh surely if you are an investor you would not want to buy club without stadium etc.

I even get it from the POV that it would protect from a rogue owner who sees real estate potential, but the question is then does it 'protect' from anyone who wants to invest verbatim!

Edited November 28, 2023 by Mr Popodopolous

[Eddie Hitler]

 

What is this legendary "main thread" of which you speak?

And who holds this 125 lease and who the freehold?

Is it me?

[Mr Popodopolous]

The Fans Forum thread, apparently we have a 125 year lease on AG, @Eddie Hitler
Am still trying to find a link to a post that references it directly.

Edited November 28, 2023 by Mr Popodopolous

[CyderInACan]

1 minute ago, Mr Popodopolous said:

The Fans Forum thread, apparently we have a 125 year lease on AG.

City & the Bears have the remainder of a 125 yr lease (I think we are 6 years into it, roughly) 

[Henry]

Surely it’s irrelevant if someone buys the whole lot? Which you would assume someone would want to buy the club and ground with Lansdown being happy with that.

[Mr Popodopolous]

1 minute ago, Henry said:

Surely it’s irrelevant if someone buys the whole lot? Which you would assume someone would want to buy the club and ground with Lansdown being happy with that.

Possibly so but it can always lead to complications. Supposing the Lansdowns don't trust a new owner to be a responsible custodian they may not be keen to let the ground go, which then puts a whole takeover in doubt.

[Eddie Hitler]

3 minutes ago, Mr Popodopolous said:

The Fans Forum thread, apparently we have a 125 year lease on AG.

 

We, as in Bristol City Holdings, of which I and many on here used to hold shares and some still do, used to own it outright through a subsidiary company.

At some point the ownership of the freehold must have been sold and I was totally unaware of that.

If I was still holding shares then I would be rather peeved and asking questions about whether it was a genuinely fair value transaction.

However I took up the Lansdowns' offer to buy my shares at the price I paid for them, which was very generous of them and a real thank you for those of us who helped the club when it asked for help, so with no vested interest I can't moan about it.

[Henry]

2 minutes ago, Mr Popodopolous said:

Possibly so but it can always lead to complications. Supposing the Lansdowns don't trust a new owner to be a responsible custodian they may not be keen to let the ground go, which then puts a whole takeover in doubt.

Well, if you believe what SL and JL say, they wouldn’t let anything go to someone they don’t trust.

My problem is, I don’t trust their judgement.

[italian dave]

18 minutes ago, Mr Popodopolous said:

I know it was mentioned in the main thread but does this deserve a thread of its own.

On one hand, security of tenure is all well and good but otoh surely if you are an investor you would not want to buy club without stadium etc.

I even get it from the POV that it would protect from a rogue owner who sees real estate potential, but the question is then does it 'protect' from anyone who wants to invest verbatim!

Short answer for me, I think, is that if a potential investor saw that as a barrier then I wouldn’t want them investing. 

[Mr Popodopolous]

4 minutes ago, Eddie Hitler said:

 

We, as in Bristol City Holdings, of which I and many on here used to hold shares and some still do, used to own it outright through a subsidiary company.

At some point the ownership of the freehold must have been sold and I was totally unaware of that.

If I was still holding shares then I would be rather peeved and asking questions about whether it was a genuinely fair value transaction.

However I took up the Lansdowns' offer to buy my shares at the price I paid for them, which was very generous of them and a real thank you for those of us who helped the club when it asked for help, so with no vested interest I can't moan about it.

Here we go, found it EH.

Coincides with the creation of AGL in 2005 or 2006.

Bristol City FC Accounts for the season of 2005-06, made up to May 31st 2006, long before any meaningful redevelopment of course.

[Eddie Hitler]

4 minutes ago, Henry said:

Well, if you believe what SL and JL say, they wouldn’t let anything go to someone they don’t trust.

My problem is, I don’t trust their judgement.

 

Good point.

 

[Eddie Hitler]

1 minute ago, Mr Popodopolous said:

Here we go, found it EH.

Coincides with the creation of AGL in 2005 or 2006.

Bristol City FC Accounts for the season of 2005-06, made up to May 31st 2006, long before any meaningful redevelopment of course.

 

Well done on finding it Mr P, though that to me looks like the restructure which other clubs were doing where, from having one company holding everything, we changed to a holding company (in which some fans still have shares) which wholly owned a club subsidiary and a ground subsidiary (Ashton Gate Limited).

This was done so that if the football club went bust then it wouldn't take the ground with it.

At that stage the freehold remained owned by AG Ltd and, through them, BC Holdings Ltd.

I will also have a poke about the accounts to see when the freehold went outside the Holdings group, as I said this is all news to me.

[Eddie Hitler]

There is also this from 2014 where the SC&T had it registered as an ACV, and we'll done them.

@Mr Popodopolous

 

Ashton Gate – An Asset of Community Value

 December 10, 2014\ Stuart Rogers

In December 2014, Ashton Gate Stadium was successfully registered by the Supporters Club & Trust as an asset of community value under the Localism Act.

Put simply, it means it the owner must not dispose of the freehold or grant a lease of 25 years or more without giving interested local community groups the opportunity to put a bid together. There will be a period of moratorium following receipt of any notice of intent to sell from the owner during which restrictions on disposal will apply.

https://www.bristolcitysupporters.org/ashton-gate-asset-community-value/

 

[ashton_fan]

I thought JL said the Lansdown's weren't looking to sell the whole of Bristol Sport, just looking for an additional investor who had expertise which would benefit the group.

At least with the ground ring-fenced we won't be attracting asset-stripper type owners so I think it's a good thing. It's quite normal for businesses to get commercial properties on long-term leases in any case, can't see it putting genuine investors off.

[Mr Popodopolous]

This is the exact bit.

01:10:51, fast forward to there.

Hard to know if sold or additional investment or whatever, the Lansdowns haven't exactly provided a clear and consistent message on this in the last couple of years.

You are right @ashton_fan that was expressly additional investment but could it cause unintended difficulties down the line.

I thought Marshall glossed over it a little.

Edited November 28, 2023 by Mr Popodopolous

[Eddie Hitler]

11 minutes ago, Mr Popodopolous said:

This is the exact bit.

01:10:51, fast forward to there.

Hard to know if sold or additional investment or whatever, the Lansdowns haven't exactly provided a clear and consistent message on this in the last couple of years.

 

Thanks, the words were that nine years ago the football club was granted a 125 year lease on the stadium.

And something about the rugby club have security of tenure.

I can't think that this is correct, being an asset of community value would prevent a lease of that length being granted without opening it up.

Surely instead of being an actual lease in the formal sense it's going to be an agreement that they can keep playing there.

Otherwise if the football club is sold, as an individual company, or goes bust then it takes with it a 125 year lease on the ground which is exactly what the 2006 separation of ground and club which you picked out earlier was designed to avoid.

2014 and 2015 accounts here we come.

[Davefevs]

20 minutes ago, ashton_fan said:

I thought JL said the Lansdown's weren't looking to sell the whole of Bristol Sport, just looking for an additional investor who had expertise which would benefit the group.

At least with the ground ring-fenced we won't be attracting asset-stripper type owners so I think it's a good thing. It's quite normal for businesses to get commercial properties on long-term leases in any case, can't see it putting genuine investors off.

That’s just one option.

Other options are selling up completely, selling off bits, etc.

I believe one of the groups who were looking at investing were gonna buy the whole lot…City, Stadium, Bears, Sporting Quarter, etc.

I do wonder that having not seen anyone “bite” on the (too high a) price they wanted, they are looking more heavily at sharing the load and just seeking investment to join them.  But how much would someone put on without control?

[ashton_fan]

7 minutes ago, Davefevs said:

That’s just one option.

Other options are selling up completely, selling off bits, etc.

I believe one of the groups who were looking at investing were gonna buy the whole lot…City, Stadium, Bears, Sporting Quarter, etc.

I do wonder that having not seen anyone “bite” on the (too high a) price they wanted, they are looking more heavily at sharing the load and just seeking investment to join them.  But how much would someone put on without control?

Of course it's all speculation as we don't know what discussions have taken place but JL said the Lansdown's weren't going to "walk away" and that they had a long term commitment to the club.

[Rudolf Hucker]

1 hour ago, Mr Popodopolous said:

The Fans Forum thread, apparently we have a 125 year lease on AG, @Eddie Hitler
Am still trying to find a link to a post that references it directly.

Shit. I’ll only be 193 years old when the lease runs out. That climb up to row 29 of the Dolman will be a challenge by then so I’ll be pleased to go to our new ground. 

[Mr Popodopolous]

9 minutes ago, ashton_fan said:

Of course it's all speculation as we don't know what discussions have taken place but JL said the Lansdown's weren't going to "walk away" and that they had a long term commitment to the club.

Maybe the dial has moved then as in August 2022, SL was open to all options.

https://www.bristolpost.co.uk/sport/football/football-news/every-word-steve-lansdown-said-7433364

https://www.bristolpost.co.uk/sport/football/football-news/steve-lansdown-bristol-city-sale-8399439

[Davefevs]

4 minutes ago, Mr Popodopolous said:

Maybe the dial has moved then as in August 2022, SL was open to all options.

https://www.bristolpost.co.uk/sport/football/football-news/every-word-steve-lansdown-said-7433364

https://www.bristolpost.co.uk/sport/football/football-news/steve-lansdown-bristol-city-sale-8399439

As I said in another thread, I wonder if JL has backpedaled on not wanting to inherit the club, and now wants to?

[Numero Uno]

4 minutes ago, Davefevs said:

As I said in another thread, I wonder if JL has backpedaled on not wanting to inherit the club, and now wants to?

I was wondering that tbh. For someone with "no interest in it" he seems very involved right now.

[Eddie Hitler]

There is no lease.  There was nothing in the the years 14 / 15 / 16 and here are the fixed asset notes of firstly Ashton Gate Limited, this holds the ground, and then Bristol City Football Club Ltd.  This possibly owns the HPC but crucially owns no leasehold property.

The guy who spoke, the accountant presumably, was put on the spot with no opportunity for preparation and was incorrect in referring to a lease but there may well be a bindng agreement that the team will continue to play there for 125 years which is what he meant.

 

 

[bcfc01]

13 minutes ago, Eddie Hitler said:

There is no lease.  There was nothing in the the years 14 / 15 / 16 and here are the fixed asset notes of firstly Ashton Gate Limited, this holds the ground, and then Bristol City Football Club Ltd.  This possibly owns the HPC but crucially owns no leasehold property.

The guy who spoke, the accountant presumably, was put on the spot with no opportunity for preparation and was incorrect in referring to a lease but there may well be a bindng agreement that the team will continue to play there for 125 years which is what he meant.

 

 

Ignorant question - what do you mean by a lease ? Are you thinking of leasehold or long term rental ?

[Mr Popodopolous]

33 minutes ago, Davefevs said:

As I said in another thread, I wonder if JL has backpedaled on not wanting to inherit the club, and now wants to?

Perhaps yeah. He has got more involved of late albeit that was a just after the big call to sack NP midstream.

Not sure I trust him, Tinnion etc to steer the club all that well but time will tell. They won't jeopardise us probably either but I don't have high hopes with JL owning us for the long haul if it plays out that way.

25 minutes ago, Eddie Hitler said:

There is no lease.  There was nothing in the the years 14 / 15 / 16 and here are the fixed asset notes of firstly Ashton Gate Limited, this holds the ground, and then Bristol City Football Club Ltd.  This possibly owns the HPC but crucially owns no leasehold property.

The guy who spoke, the accountant presumably, was put on the spot with no opportunity for preparation and was incorrect in referring to a lease but there may well be a bindng agreement that the team will continue to play there for 125 years which is what he meant.

 

 

Well found although Note 20 made me wonder.

Maybe it isn't for AG at all.

On a side note, for a COO or whatever the role is, Group CEO to get that one wrong at a Fans Forum where words kinda matter, is really quite poor.

Edited November 28, 2023 by Mr Popodopolous

[Eddie Hitler]

2 minutes ago, bcfc01 said:

Ignorant question - what do you mean by a lease ? Are you thinking of leasehold or long term rental ?

 

I've cribbed a definition below, the lease is the legal agreement under which the long term rental happens.

Granting a 125 year lease would mean that the football club company would own, as in have exclusive rights to, Ashton Gate for 125 years in exchange for an agreed rental stream.

As long as the rent is paid as agreed then BCFC Ltd effectively owns the ground, whilst paying a rent to the freeholder as someone owning a leasehold flat would pay ground rent.

And to suggest that having given a 125 year lease to BCFC from the stadium company that the rugby club has similar is a nonsense.

Though as I said the guy was put in the spot, in a similar situation I might have blurted out "lease" but I would have corrected myself.

 

 

 

What Is a Lease?

A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor (the property owner or landlord) regular payments for a specified period in exchange. Both the lessee and the lessor face consequences if they fail to uphold the terms of the contract. A lease is a form of incorporeal right.

[Eddie Hitler]

4 minutes ago, Mr Popodopolous said:

Perhaps yeah. He has got more involved of late albeit that was a just after the big call to sack NP midstream.

Not sure I trust him, Tinnion etc to steer the club all that well but time will tell. They won't jeopardise us probably either but I don't have high hopes with JL owning us for the long haul if it plays out that way.

Well found although Note 20 made me wonder.

Maybe it isn't for AG at all.

On a side note, for a COO or whatever the role is, Group CEO to get that one wrong at a Fans Forum where words kinda matter, is quite poor.

 

Though those are operating leases for cars or whatever, you wouldn't disclose payments under a 125 year lease as operating lease payments.

[Mr Popodopolous]

14 minutes ago, Eddie Hitler said:

 

Though those are operating leases for cars or whatever, you wouldn't disclose payments under a 125 year lease as operating lease payments.

Think you're right.

Up until 2015 having looked through several years worth, it for a time separated it out into Land and Buildings on one hand then the rest on the other.

Perhaps a change to FRS 102 saw a change to this.

Thereafter it was Operational Hire and Purchase or something similar. Now it isn't listend as any category especially and even it it was, the rent is immaterial in the context of the ground but as you say most likely for cars or something like that.

[bcfc01]

1 minute ago, Eddie Hitler said:

 

I've cribbed a definition below, the lease is the legal agreement under which the long term rental happens.

Granting a 125 year lease would mean that the football club company would own, as in have exclusive rights to, Ashton Gate for 125 years in exchange for an agreed rental stream.

As long as the rent is paid as agreed then BCFC Ltd effectively owns the ground, whilst paying a rent to the freeholder as someone owning a leasehold flat would pay ground rent.

And to suggest that having given a 125 year lease to BCFC from the stadium company that the rugby club has similar is a nonsense.

Though as I said the guy was put in the spot, in a similar situation I might have blurted out "lease" but I would have corrected myself.

 

 

 

What Is a Lease?

A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor (the property owner or landlord) regular payments for a specified period in exchange. Both the lessee and the lessor face consequences if they fail to uphold the terms of the contract. A lease is a form of incorporeal right.

Thanks.

I asked as I had a long term lease on a business property but didn't own it during the length of the lease, whereas I also had a leasehold property which I owned for the duration of that lease. I wasn't sure which type of lease you (and GM) were speaking about. GM maybe could have been a bit clearer, but he answered the question which confirmed the club will have a home for the next 116 years.

 

 

[One Team]

Not sure I’ve got this, but are we saying the rugby club has a right to play at the Gate for 125 years as well?