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Grounds for Concern

Redlandram

By Redlandram
in Derby County Forum

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Rev

Rev

Posted
Posted
3 minutes ago, TommyPowel said:

 

I dont suppose there is anything to stop MM paying the club anything from £2 to £20million for the advertising rights

My post was a Elf joke.

As for the above, I'm pretty sure they have rules around what's fair and reasonable for a connected party to pay for sponsorship.

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cheron85

cheron85

Posted
Posted
8 minutes ago, TommyPowel said:

I dont suppose there is anything to stop MM paying the club anything from £2 to £20million for the advertising rights

Yeh there is - Market value - Man City got into trouble for over-valuing the naming rights of their stadium - We're under investigation to ensure the independent valuation we got on the ground was right - There's almost always something to compare to

The only way of putting a 'set your own price' value on advertising is if it's impossible to reach the audience any other way - That is definitely not the case here

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G STAR RAM

G STAR RAM

Posted
Posted
6 hours ago, cheron85 said:

Possible, but I'd suggest more challenging to justify

Currently (I assume) we rent the ground for game days only - Meaning any revenue we generate on game day (ticket sales, food, drink, corporate etc) would presumably be for the club

Other revenue sources suggest are things like gigs - Which the stadium would host - However it would be difficult to argue that the club were renting the stadium that day in order to host a gig - I'm not sure that's feasible TBH

Dont think this is correct.

If DCFC lease the ground  it will be for a period of so many years, not just odd days.

The ground will be DCFCs to do what they want with it, obviously subject to the terms of the lease. 

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TommyPowell

TommyPowell

Posted
Posted
5 hours ago, cheron85 said:

Yeh there is - Market value - Man City got into trouble for over-valuing the naming rights of their stadium - We're under investigation to ensure the independent valuation we got on the ground was right - There's almost always something to compare to

The only way of putting a 'set your own price' value on advertising is if it's impossible to reach the audience any other way - That is definitely not the case here

So ok you set the price of being able to sell advertising space around PP?

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Tamworthram

Tamworthram

Posted
Posted
10 hours ago, TommyPowel said:

So ok you set the price of being able to sell advertising space around PP?

I'd be amazed if some marketing consultantcy couldn't advise the EFL on what might be a reasonable market rate based on similar venues, locations and size of advertising screen/board. 

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Stive Pesley

Stive Pesley

Posted
Posted
16 hours ago, RadioactiveWaste said:

Our issue is was the valuation realistic.

if someone else pops up to buy it for the cost Mel payed it's going to be hard to say it isn't.

Like say, a Swiss Turkish Billionaire Hedge Fund Owner perhaps?

It's all stupid anyway - the Profit & Sustainability rules are supposed to be their to ensure that clubs live within their means, don't overspend and don't go bust. Where is the sense in punishing clubs with points deductions, fines or relegation? It's a daft as when the bank charge you for going overdrawn - sending you further into overdraft..

We surely also have a conflict of interest as Stephen Pearce - our CFO currently sits on the EFL Board of Directors!

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Spanish

Spanish

Posted
Posted
2 minutes ago, SchtivePesley said:

Like say, a Swiss Turkish Billionaire Hedge Fund Owner perhaps?

It's all stupid anyway - the Profit & Sustainability rules are supposed to be their to ensure that clubs live within their means, don't overspend and don't go bust. Where is the sense in punishing clubs with points deductions, fines or relegation? It's a daft as when the bank charge you for going overdrawn - sending you further into overdraft..

We surely also have a conflict of interest as Stephen Pearce - our CFO currently sits on the EFL Board of Directors!

So what is the solution?  No promotion if there is a breach?  Then you have the Gatland (sprinter situation) where he gets caught twice, gets two suspensions and comes back with all the benefits of his previous bad behavior.   I understand the point that the punishment could ultimately result in a situation that they are trying to 'legislate' against but there has to be a punishment of some sort as a deterrent.

As with the bank, don't spend what you don't have.  If you use other people's money expect to pay for it

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Stive Pesley

Stive Pesley

Posted
Posted
10 minutes ago, Spanish said:

So what is the solution? 

I don't really know TBH - just that the current P&S rules (and the FFP rules before that) don't seem fit for purpose. It doesn't help that the rules are voted on and decided upon by the clubs themselves, so as Mel has pointed out himself at various fan forums - you immediately start thinking of creative ways around the vagaries of the rules as you decide upon them

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Spanish

Spanish

Posted
Posted
1 minute ago, SchtivePesley said:

I don't really know TBH - just that the current P&S rules (and the FFP rules before that) don't seem fit for purpose. It doesn't help that the rules are voted on and decided upon by the clubs themselves, so as Mel has pointed out himself at various fan forums - you immediately start thinking of creative ways around the vagaries of the rules as you decide upon them

got to agree.  still looks like a policy to protect the prem elite.  Didn't all this start due to HMRC concerns that they were not preferred to the same degree as with any other business?  I do sort of get it, we don't want new owners committing clubs to unsupported costs in a gamble for promotion; walking away when it doesn't work out.  Trouble is it has created a 2 tier football league with different P&S rules and parachute payments 

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Stive Pesley

Stive Pesley

Posted
Posted
3 minutes ago, Spanish said:

got to agree.  still looks like a policy to protect the prem elite.  Didn't all this start due to HMRC concerns that they were not preferred to the same degree as with any other business?  I do sort of get it, we don't want new owners committing clubs to unsupported costs in a gamble for promotion; walking away when it doesn't work out.  Trouble is it has created a 2 tier football league with different P&S rules and parachute payments 

Yeah - it almost feels like you have to have no rules at all - and just let the individual clubs decide on how much they want to gamble (and if they go bust then they go bust)

Or you have to have rules so stringent and clear that it stops any club from investing big money at all

The current attempts to find a middle ground aren't really working in either direction (ask Bury fans)

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Gaspode

Gaspode

Posted
Posted
18 minutes ago, SchtivePesley said:

Yeah - it almost feels like you have to have no rules at all - and just let the individual clubs decide on how much they want to gamble (and if they go bust then they go bust)

Or you have to have rules so stringent and clear that it stops any club from investing big money at all

The current attempts to find a middle ground aren't really working in either direction (ask Bury fans)

Be far better if they did a better job of deciding whether potential owners were 'fit & proper' people....biggest cause of clubs getting into serious issues is the calibre of the owners and some of the dubious decisions they make....

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cheron85

cheron85

Posted
Posted

Apologies for the slow reply chaps

On 05/12/2019 at 19:50, G STAR RAM said:

Dont think this is correct.

If DCFC lease the ground  it will be for a period of so many years, not just odd days.

The ground will be DCFCs to do what they want with it, obviously subject to the terms of the lease. 

Depends on the terms of the lease - The cheapest way to lease a ground (which I assume is what we've done) is to lease for only match days - Otherwise you're paying for days you're not using it

I suppose in theory we could change the terms of the lease later down the line when there is more opportunity to generate revenue - However with the way the EFL are scrutinising everything at the moment I'd suggest they'd stamp down on that pretty quickly

I think the most likely would be Morris' new company adapts the stadium and generates some profit for him - And when/if we get promoted we used some of the vast TV revenues to buy the ground back

On 05/12/2019 at 22:26, TommyPowel said:

So ok you set the price of being able to sell advertising space around PP?

Again depends on the value of doing so - Not all that many people come past PP in advertising terms - Most places generate ad revenue by leasing space on their land to someone like Clearchannel or JCDecaux and generate a small trickle of revenue that way

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TommyPowell

TommyPowell

Posted
Posted
3 hours ago, cheron85 said:

Apologies for the slow reply chaps

Depends on the terms of the lease - The cheapest way to lease a ground (which I assume is what we've done) is to lease for only match days - Otherwise you're paying for days you're not using it

I suppose in theory we could change the terms of the lease later down the line when there is more opportunity to generate revenue - However with the way the EFL are scrutinising everything at the moment I'd suggest they'd stamp down on that pretty quickly

I think the most likely would be Morris' new company adapts the stadium and generates some profit for him - And when/if we get promoted we used some of the vast TV revenues to buy the ground back

Again depends on the value of doing so - Not all that many people come past PP in advertising terms - Most places generate ad revenue by leasing space on their land to someone like Clearchannel or JCDecaux and generate a small trickle of revenue that way

Compare that to how much Bet33 is paying for Rooney to wear the shirt

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cheron85

cheron85

Posted
Posted
15 minutes ago, TommyPowel said:

Compare that to how much Bet33 is paying for Rooney to wear the shirt

I think I covered this in the thread when he signed - They're paying for the organic media coverage - With sponsorship you have to calculate how much media exposure the brand will get for having a high profile name attached to it - For example pretty much every national newspaper, most online news brands and the TV news on every station covered the signing and had Rooney stood there with a Derby shirt and the brand splashed on the front - Plus I would imagine we'll get similar coverage again when he plays his first game AND we'll be on the tellybox more often moving forwards - That has HUGE amounts of media value which you'd have to pay millions of pounds to replicate with paid advertising

The outside of Pride Park doesn't get covered anywhere near as often - I'd doubt if the DET even covers it - Therefore the value of the ads around there is dictated by how many people will see it (as is all advertising/promotion/sponsorship)

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