Ron Martin - Questions and Answers

South Bank Hank · 25-09-2008, 02:41 PM

Whatever the madness behind the method, as we all know, our very own Irate Ian raised a number of questions with Ron Martin. Whatever his motivations, Ron Martin took the time to answer those questions with approval for publishing them on this site.

People have suggested bringing those questions together in a new thread as one thing we can probably ALL agree on is that the thread in question is now a complete mess.

To avoid the thread de-generating again, let's ensure that this thread relates only to the questions and answers themselves (and not the person asking the questions, the person answering the questions, their rights, obligations, interests or otherwise). If you are not interested in the questions or answers, please do not post on the thread.

Ian's questions and Ron's answers now appear below.

South Bank Hank · 25-09-2008, 02:44 PM

Ian's Questions - Part One

Quote:

Originally Posted by Irate Ian

Q1. Who [names of all consortia members] or what corporation [and names of their shareholders] are the beneficial owners of the land on which the Fossetts development is proposed.

Ron Martin: The immediate parent company of Southend United Football Club Ltd is South Eastern Leisure (UK) Ltd, of which I, via my corporate ownership, am a 100% share holder. There are no “consortia members”. It took Delancey and myself a while to come to terms for me to acquire their 50% interest in the parent company and I am in no hurry to re-enter into a joint venture! The beneficial owners of the Fossetts Farm development are me and my immediate family.

Q2. In consideration for the release of restrictive covenant of use of land at Roots Hall now or previously, what if any long term security of tenure are SUFC to be granted at the proposed new stadia and by what vehicle or deed.

Ron Martin: I do not know what you mean by “release of restrictive covenant of use of land at Roots Hall”. The restrictive covenants recited in the title are not enforceable and in any event as a quid pro quo the entire proposal is structured on the development of the New Stadium. The Club will not be moving from Roots Hall until the new stadiums is complete and fit for football.

Q3. What terms of lease and anticipated rent is to be payable [and to whom] by SUFC at Fossetts. Also what termly rent reviews are proposed.

Ron Martin: The Club currently benefits from a short term lease at Roots Hall and which has been renewed at least twice. The rent was de-capped to represent 10% of the initial investment at the time i.e. £4m – to prevent an almost certain administration – providing for an annual rent of £400,000. As you will know the Club has not paid one penny in rent in respect of Roots Hall and in very recent years I have written off some £2.8m in rent arrears so as to improve the Club’s balance sheet. Furthermore it is not my intention to charge the Club any rent while it remains here at Roots Hall.

Under the terms of the new stadium a lease in precisely the same format will exist for the benefit of the Club at the new stadium but for a longer term to ensure the security of tenure that you allude to. There will be a Stadium Operating Company which will collect all the rental income from the stadium development and redistribute this, including for the benefit of the Club. This will underpin its gate receipts and, we anticipate, give the Club an edge over its competitors. As to whether any rent will be paid or accrued will largely depend on the Club’s success - but in any event it is intended that there will be quarterly reviews, as indeed is the case at present.

Q3a Does Ron feel that because of his possible need to maximise profits from the development, that he has any possible conflict of interest with the needs of SUFC to remain solvent during its use and occupation of the stadium.

Ron Martin: I do not feel there is a need to maximise profits from the development. If this were the objective then I would not be building a 22,000 seater stadium of such high specification. Colchester Stadium cost £14m, some £30, less than that estimated to complete what will be an iconic building for SUFC to thrive and succeed.

Even now there are supporters who suggest we could compete in the Championship from a stadium of 15,000 seats. If I were to take that “advice” I could save a minimum of £14m in construction costs. Similarly there is no need to include a hotel at a further cost of £10m. Therefore if I was seeking to maximise property profits (if such a thing still exists!) there would have been many opportunities to do so.

Q3b If the immediate landlord sells the freehold, will any provision for SUFC being protrected against eviction be envisaged.

Ron Martin: If the freehold of the stadium were to be sold at some future date SUFC would be protected by the terms of its lease. I would never leave it in a position to risk “eviction”. I regard that comment/question as a strange observation when the entire purpose of this exercise is to bring success to the Club so that it can maximise its potential and compete in the upper echelons of the Championship. It is certainly not designed to see the Club fail.

Q3c In the event of SUFC Ltd entering any form of Insolvency, will the football team trading under the name of Southend United be given first refusal to continue use and occupation under identical terms as SUFC Ltd under the proposed Lease or Trust Deed so that perpetual occupation by any re-incarnation of Southend United only be first assured ?

Ron Martin: As I say above, the purpose of this structure is to underpin the Club’s financial security. However I am not a prophet; I cannot predict what the ultimate future may hold save I am creating a framework to secure the Club’s future and tenure. In reality very few clubs go out of business and if there were future financial problems for the Club I would suggest the Club and its new home – which we are in the throes of creating – will be a very attractive investment to any would-be buyer.

Q4. Who will be (a) the immediate and (b) the residual landlord.

Ron Martin: The immediate landlord would be the Stadium Operating Company. I have not yet thought of a name for that entity (SOC is halfway there!) but I will be represented on the Board along with others who have Southend United Football Club’s interests at heart. By “residual landlord” you may mean ultimate and, of course, here again this would fall under the umbrella of beneficial ownership as in 1 above.

Q5. Will there be a right of forfeiture of lease for faliure to pay rent on a timely basis or other covenants.

Ron Martin: All institutional leases have the right of forfeiture, as does the lease the Club holds at present. As I say above, over the past nine years the Club has paid no rent at Roots Hall and there has been no question as to its right to occupy. The lease structure will be the same (again as I say above) at the new stadium and there will be no restrictive covenants to undermine the Club’s interests.

Q6. Will SUFC have sole use of the stadium and capability to derive benefit of income from other permitted uses.

Ron Martin: SUFC will not have sole use of the stadium as the west stand will be occupied by a number of parties including a hotel and other ancillary uses such as offices, all of which will provide an income to the benefit of the stadium operating company which can then flow, as directed by that Board, to the benefit of the Football Club as appropriate. Additionally under the current approval there is also the right to hold concerts on limited occasions throughout the year. If I were able to include – subject to the Council’s approval – an arena as part of the stadium structure (encompassing the west stand seating and facilities) this would have enormous synergy providing still further income for the operating company and Football Club. I am currently undertaking a feasibility study in this connection. If this proves viable and consent is forthcoming then this phase of construction would be integrated within the programme.

Q7. What other uses are envisaged.

Ron Martin: See 6 above

Q8. Does RM envisage SUFC being capable of meeting payment of rent based upon the projected operating costs of SUFC at the new stadium.

Ron Martin: The answer is yes, but as I say in 3 above whether the rent is paid or written off will be a matter for the stadium operating company and will be determined entirely by the success of the Club. Which, of course, is pivotal to this entire exercise.

South Bank Hank · 25-09-2008, 02:48 PM

Ian's Questions - Part Two

Quote:

Originally Posted by Irate Ian

Q9. What are the projected financials viz can the club sustain to trade with the overheads that are anticipated.

Ron Martin: I have not got a crystal ball to accurately determine what the projected financials might be in the new stadium although, in conjunction with Deloitte, we did table an analysis at the Inquiry. Since that time I have continued to carry out financial engineering exercises on the stadium design together with income modelling and I believe we will do even better than those assessments. It is important to remember that whilst the gap between the Premiership and Championship continues to grow in terms of TV income, the same applies to the Championship and League 1. I have made this point a number of times and it continues to hold true.

Q9a Do the financials assume higher level of average gate, if so what average number?

No Response - this + 9b & 9c were added questions after original series were raised.

Q9b. How was this number estimated and what if any market research may have been undertaken and will this be published, if so, when.

No Response

Q9c. Has Ron considered raising capital by SUFC from its supporters by other than purchase of shares; for the advance purchase of season cards for (a) more than one year (b) life (c) perpetual (in form of some type of foundation debenture purchase as with the Royal Albert Hall)

No Response

Q10. What liabilites are presently subsisting to the owners of Roots Hall by SUFC in respect of rent service charges or other liability.

Ron Martin: As is a matter of public record from the Club’s audited accounts, the rent due to the parent company has been written off and there has never been any “service charges” (whatever that means!) payable or liable.

Q11. What is to be done concerning these liabilities if the development proceeds.

Not relevant – see 10 above

Q12. What if any pre-conditions are anticipated for advance purchase of season cards for above 1 year.

Ron Martin: I do not envisage there to be any “preconditions” for the purchase of season cards over one year. To the contrary, we would wish to encourage supporters of the Club to secure their seats and that is why I have been investigating the merits of the Morgan Stanley entity – Stadium Capital Financing Group. This is a proprietary product which, in my view, is an absolute win-win situation for the Club and its supporters. However I must emphasise this would be limited to no more than 6% of the stadium capacity (with an order of priority i.e. shareholders, existing season ticket holders etc.) to avoid any adverse impact on future income streams.

Q13. Will any purchase include all/or any events taking place at the stadium.

Ron Martin: In the event that we operate such a scheme as described in 12 above, I would propose that it would include, in some way, all events in the stadium. As such the seat purchase would include a premium payment but which we would seek to mesh with a long term purchase facility so that the commitment could be discharged over a number of years on a monthly basis thereby lessening any burden.

Q14. If not, will season card holders be afforded first refusal on other than football events in "their" seats.

This is answered in 13 above.

Q15. What other information can Ron disclose to supporters that will serve to enable a greater understanding of the proposed legacy he anticipates bestowing upon SUFC in return for the club being the vehicle by which his or other development companies can ultimately re-develop the site of Roots Hall.

Ron Martin: I do not have any preconceived views on this. My primary objective is to ensure the Club’s financial stability within an infrastructure that gives it the opportunity to maximise its potential from the Club’s immediate demographic. I believe what I am seeking to create will achieve that and in many respects a large percentage of the hard work has already come to fruition – including the “key” Sainsbury approval. The next stage, notwithstanding the financial turmoil that the banks’ own illiquidity is causing, is more controllable.

If you are asking would I convey the stadium to, say, the Local Authority; the answer is probably no. Alternatively if you are suggesting would I place it in trust; I would suspect the answer today would equally be no. I think the best interests of the Club and its supporters are served by the attraction of further investment and therefore to ring fence the Club’s principal asset may detract from that opportunity.

Whatever the case my intention is to see Southend United succeed and this entire project is geared to that goal – football vernacular!

shrimpfan · 09-10-2008, 07:18 PM

Quote:

Originally Posted by South Bank Hank

Ian's Questions - Part Two

question no 9====answer 9 from ron===http://www.spiritwalker.info/acatalog/Crystal_Sphere_s.html

The Big Dady · 09-10-2008, 08:05 PM

Quote:

Originally Posted by shrimpfan

question no 9====answer 9 from ron===http://www.spiritwalker.info/acatalog/Crystal_Sphere_s.html

Think you mite mean this?

Link

Scamps · 10-10-2008, 11:30 AM

When will they start work on this stadium is what i want to know????

TJC · 09-12-2008, 02:08 PM

I suspect we may be in for a longer wait than hoped for the new stadium due to current market conditions. However, if Sainsburys want Roots Hall, maybe they will have to 'sub' the stadium development shortfall? Maybe they are reconsidering the move to save costs?

More concerning is that Ron and his business cannot be immune to the current climate and I sincerely hope that Martin Dawn is stable enough to ride this out. Firstly for the stadium dream to continue, and more importantly, that Rons involvement in SUFC doesn't become an unnessasary expense. We need Ron to survive and surely has to be one of the greatest owner/chairman the club has ever had.
Stick with it Ron!

Irate Ian · 09-12-2008, 05:18 PM

Quote:

Originally Posted by TJC

I suspect we may be in for a longer wait than hoped for the new stadium due to current market conditions. However, if Sainsburys want Roots Hall, maybe they will have to 'sub' the stadium development shortfall? Maybe they are reconsidering the move to save costs?

More concerning is that Ron and his business cannot be immune to the current climate and I sincerely hope that Martin Dawn is stable enough to ride this out. Firstly for the stadium dream to continue, and more importantly, that Rons involvement in SUFC doesn't become an unnessasary expense. We need Ron to survive and surely has to be one of the greatest owner/chairman the club has ever had.
Stick with it Ron!

Does not touch alcohol so he should have a clear enough head to hopefully make the right decisions, dsespite the volatile & uncertain financial climate.

RM does indeed have opportunity to bestow a lasting legacy to the club and yes become what you state above, but very early days and the detailed cost to SUFC for use and occupation of FF will not be known for quite a while yet, it seems.

Rusty Shackleford · 12-12-2008, 10:27 PM

Q1. Who [names of all consortia members] or what corporation [and names of their shareholders] are the beneficial owners of the land on which the Fossetts development is proposed.

Ron Martin: Shut up Ian

Q2. In consideration for the release of restrictive covenant of use of land at Roots Hall now or previously, what if any long term security of tenure are SUFC to be granted at the proposed new stadia and by what vehicle or deed.

Ron Martin: Shut up Ian

Q3. What terms of lease and anticipated rent is to be payable [and to whom] by SUFC at Fossetts. Also what termly rent reviews are proposed.

Ron Martin: Shut up Ian

Q3a Does Ron feel that because of his possible need to maximise profits from the development, that he has any possible conflict of interest with the needs of SUFC to remain solvent during its use and occupation of the stadium.

Ron Martin: Shut up Ian

Q3b If the immediate landlord sells the freehold, will any provision for SUFC being protrected against eviction be envisaged.

Ron Martin: Shut up Ian

Q3c In the event of SUFC Ltd entering any form of Insolvency, will the football team trading under the name of Southend United be given first refusal to continue use and occupation under identical terms as SUFC Ltd under the proposed Lease or Trust Deed so that perpetual occupation by any re-incarnation of Southend United only be first assured ?

Ron Martin: Shut up Ian

Q4. Who will be (a) the immediate and (b) the residual landlord.

Ron Martin: Shut up Ian

Q5. Will there be a right of forfeiture of lease for faliure to pay rent on a timely basis or other covenants.

Ron Martin: Shut up Ian

Q6. Will SUFC have sole use of the stadium and capability to derive benefit of income from other permitted uses.

Ron Martin: Shut up Ian

Q7. What other uses are envisaged.

Ron Martin: See 6 above

Q8. Does RM envisage SUFC being capable of meeting payment of rent based upon the projected operating costs of SUFC at the new stadium.

Ron Martin: Shut up Ian

Q9. What are the projected financials viz can the club sustain to trade with the overheads that are anticipated.

Ron Martin: Shut up Ian

Q9a Do the financials assume higher level of average gate, if so what average number?

No Response - this + 9b & 9c were added questions after original series were raised.

Q9b. How was this number estimated and what if any market research may have been undertaken and will this be published, if so, when.

No Response

Q9c. Has Ron considered raising capital by SUFC from its supporters by other than purchase of shares; for the advance purchase of season cards for (a) more than one year (b) life (c) perpetual (in form of some type of foundation debenture purchase as with the Royal Albert Hall)

No Response

Q10. What liabilites are presently subsisting to the owners of Roots Hall by SUFC in respect of rent service charges or other liability.

Ron Martin: Shut up Ian

Q11. What is to be done concerning these liabilities if the development proceeds.

Not relevant – see 10 above

Q12. What if any pre-conditions are anticipated for advance purchase of season cards for above 1 year.

Ron Martin: Shut up Ian

Q13. Will any purchase include all/or any events taking place at the stadium.

Ron Martin: Shut up Ian

Q14. If not, will season card holders be afforded first refusal on other than football events in "their" seats.

This is answered in 13 above.

Q15. What other information can Ron disclose to supporters that will serve to enable a greater understanding of the proposed legacy he anticipates bestowing upon SUFC in return for the club being the vehicle by which his or other development companies can ultimately re-develop the site of Roots Hall.

Ron Martin: Shut up Ian and **** Right Off