The Tigers business model

[fleabane]

The car park and hotel are not part of the core business. They are periphery items which, although they are likely to produce revenue, are initially cost, rather than profit centres. Is LFC a developer? Is that core? Modern business models concentrate on developing the core, not getting financially involved, or possibly even reliant on peripherals, such as these. Reliance means they become core, and rugby the peripheral. That is the American franchise model, which I do not believe we want.

[johnthegriff]

Having a car park that can satisfy the needs of spectators and users of the conference facilities is core business. Although a partner is necessary for the hotel not to buy would mean no control over what goes on the Granby Halls site, part of the plan is an area to be used by fans on match days. As previously stated investments that produce revenue help to finance the necessary expenditure on team and support staff that would otherwise have to be curtailed,

[fleabane]

We will have to agree to disagree John on "core".

Happy Christmas

[G.K]

Depends whether you want a Rugby club or a Business. Tigers Business model falls somewhere between the two and to me it seems to be run more as a hobby by those who live offshore.

[Noddy555]

Yes all well and good that we are purchasing the land from the council and building a hotel and car parks, which is a case I've advocated for years, but I worry that we are taking on too much at the same time financially and this could be a case for persueing the right type of Sugar Daddy or partners who can provide that financial security without impacting on our ability to field a decent team that can compete successfully for the honours of the game.

[Cardiff Tig]

The car park and hotel are not part of the core business. They are periphery items which, although they are likely to produce revenue, are initially cost, rather than profit centres. Is LFC a developer? Is that core? Modern business models concentrate on developing the core, not getting financially involved, or possibly even reliant on peripherals, such as these. Reliance means they become core, and rugby the peripheral. That is the American franchise model, which I do not believe we want.

The problem is rugby alone as the core business isn't sustainable anymore, or isn't sustainable when lots of other teams aren't sticking to the same model. The hotel and carpark are as integral to the longterm success of the club - at least in our current business model.

[Tom Tom]

Depends whether you want a Rugby club or a Business. Tigers Business model falls somewhere between the two and to me it seems to be run more as a hobby by those who live offshore.

Those living 'offshore', together with one or two of the other board members, are surely wealthy enough to finance the development even as individuals if they so wished.
They could as individuals or as a new company set up just for this project, charge back interest etc. making it a proper business loan and proper commercial transaction and legitimate investment.
There are some 'big hitters' on the board, e.g. Peter Tom, David Abell, Tom Scott.
If they are confident this is a commercial (profitable in the long term) proposition, they should offer to put up the dosh to do the development and allowing Tigers to run it.
The excess of income over interest and capital repayments back to the lenders should go into Tigers coffers.
If they won't then that for me says its a non starter and the Club are signing up and being committed to something that is not sustainable long term.

At the very least by doing this the accusation of running the Tigers business as a 'hobby' would be unfounded.

[MikeR]

I suspect that their is a fair chance that one or more of the names you mention may well inject further capital into the Club - I believe go ahead to issue more shares was given at the last AGM .I would be slightly more worried at the attendance figures at matches - 24,000 at the Munster game , perhaps 5 or 6,000 were Munster fans .If we can only get 18,000 of our own to watch a big game like that then this is not a good sign .We need to get a winning team pretty soon before a real decline sets in .

[Tom Tom]

I suspect that their is a fair chance that one or more of the names you mention may well inject further capital into the Club - I believe go ahead to issue more shares was given at the last AGM .I would be slightly more worried at the attendance figures at matches - 24,000 at the Munster game , perhaps 5 or 6,000 were Munster fans .If we can only get 18,000 of our own to watch a big game like that then this is not a good sign .We need to get a winning team pretty soon before a real decline sets in .

What I was meaning is that the development should be in a completely separate company away from Tigers.
That way it will succeed or fail on its own merits.
If it fails (which would be a surprise if Peter Tom, David Abell, Tom Scott. & Co invest) then it will be sold to the highest bidder by the Receiver and it will be at its true commercial worth.
If Tigers have the money then they could even buy it at less than it cost to set up initially - it happens!
Tigers should concentrate on its core business which is Rugby and delivering the country's best match day experience for ST holders and all who visit Welford Road.
Earn incremental income where ever you can.....and start by sorting out once and for all the catering and service at the bars.

[Tigerbeat]

I suspect that their is a fair chance that one or more of the names you mention may well inject further capital into the Club - I believe go ahead to issue more shares was given at the last AGM .I would be slightly more worried at the attendance figures at matches - 24,000 at the Munster game , perhaps 5 or 6,000 were Munster fans .If we can only get 18,000 of our own to watch a big game like that then this is not a good sign .We need to get a winning team pretty soon before a real decline sets in .

Only a small number of tickets are issued to away teams as there are no restrictions for group games.
Tickets have been available for all fans to buy online so would suggest that many Munster fans purchased online well in advance, hence the significant numbers.

[MikeR]

My point is that very few extra tickets were purchased by Tigers non season ticketholders.

[Tigerbeat]

I understand only 500 tickets approximately were sold by Munster for the fixture. Your estimate of 5-6000 Munster fans is probably a bit excessive. I would guess approximately 1500 but they were in there own areas and made some noise.

[wormus]

Having a car park that can satisfy the needs of spectators and users of the conference facilities is core business. Although a partner is necessary for the hotel not to buy would mean no control over what goes on the Granby Halls site, part of the plan is an area to be used by fans on match days. As previously stated investments that produce revenue help to finance the necessary expenditure on team and support staff that would otherwise have to be curtailed,

I totally agree with Noggs and Johnthegriff, whether the hotel and carpark projects are "core" or "capital assets" they are required to generate the cash flow between the seasons and provide the medium / long term income to boost the salary cap by utilising our great conferencing facilities. Wasps have I believe the casino & hotel generating their out of season income. Let us fill the present stands before thinking of the Crumbie replacement although they may require the carpark area to construct it.

[Noddy555]

Tigerbeat I have it on good authority that 1672 Munster fans attended the match last Saturday this includes specially invited guests who's ticket details aren't
logged until after the game in case of non attendance. I took the Train home from Leicester last Saturday which was full of Munster supporters getting off at Derby and taking the bus from there to East Midlands airport as that particular train did not stop at East Midlands Parkway. Despite their loss they were all in good spirits and I don't know whether this was from the Guinness or from the fact that they still have a match in hand.

[mol2]

Building 2 stands in quick succession and buying the car park are bound to impact on cash flow.

Would the latest stand have been built had the opportunity to buy the car park come up earlier?
I guess not to avoid the cash flow problems that are bound to occur.