Oxford United must pay more for stadium

Oxford United expect to pay an increase of up to £100,000 a year for the service charge they pay to their landlords at the Kassam Stadium.

Last November, the U’s settled a dispute with Firoz Kassam’s company Firoka Ltd for additional charges relating to four years up to last summer.

The one-off payment of £298,000 put the latest club’s accounts, for the year to June 2011, into the red as they recorded a loss of £296,000.

And chairman Kelvin Thomas revealed at the AGM the club would be paying higher rates from now on – although it is unclear whether it would be affected by the ground-share with London Welsh.

He said: “There will be an estimated £75-100k increase per year moving forward, but this will be absorbed into the profit and loss rather than being treated as a exceptional item.

“The club is disappointed with the effect on the financials for the year, but is pleased the matter is resolved.”

Thomas was encouraged by the rest of the figures, with the U’s increasing turnover by 24 per cent, from £2.6m to £3.2m.

It meant they had an operating profit of £10,000, compared to a £91,000 loss for the previous year, while £175,000 of external debt was also repaid.

Meanwhile, United have broken their silence over the ground-share with London Welsh.

When chairman Kelvin Thomas was questioned about the matter at the club’s annual general meeting, he said: “We have been in dialogue with London Welsh, but will not know full details until we sit down with them next week.

“We can’t really say much more about the advantages and disadvantages until we know full details.”

Comments (26)

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11:30am Thu 5 Jul 12

karatavuk says...

Kassam continues to bleed the club dry.
More money in his pocket and he can make more out of London Welsh.
Kassam continues to bleed the club dry. More money in his pocket and he can make more out of London Welsh. karatavuk
  • Score: 3

1:03pm Thu 5 Jul 12

EMBOX1 says...

karatavuk wrote:
Kassam continues to bleed the club dry.
More money in his pocket and he can make more out of London Welsh.
Yep, OUFC need to find a way of buying the stadium (be that via a local high net-worth invididual buying it, and leasing back to the club, or other means).
[quote][p][bold]karatavuk[/bold] wrote: Kassam continues to bleed the club dry. More money in his pocket and he can make more out of London Welsh.[/p][/quote]Yep, OUFC need to find a way of buying the stadium (be that via a local high net-worth invididual buying it, and leasing back to the club, or other means). EMBOX1
  • Score: 1

1:06pm Thu 5 Jul 12

HopefulOx says...

was anything said about intentions of incoming players ? squad size ?
was anything said about intentions of incoming players ? squad size ? HopefulOx
  • Score: 0

1:18pm Thu 5 Jul 12

Joe1 says...

WE MUST GET OUT OF THIS SITUATION!!!!COTS WILL INCREASE EACH YEAR DEPENDING KASSAMS COMPANY IS DOING. WE WILL BE IN HIS POCKET AS LONG AS THIS SITUATION CONTINUES.
FOR THE SAKE OF OUR CLUB GET OUT OR BUY THE STADIUM.
WE MUST GET OUT OF THIS SITUATION!!!!COTS WILL INCREASE EACH YEAR DEPENDING KASSAMS COMPANY IS DOING. WE WILL BE IN HIS POCKET AS LONG AS THIS SITUATION CONTINUES. FOR THE SAKE OF OUR CLUB GET OUT OR BUY THE STADIUM. Joe1
  • Score: 3

3:37pm Thu 5 Jul 12

johnnylyle says...

From a purely commercial point of view, as a developer, you would expect a 5-7% or so yield from any build.

My simple maths tells me that if we are now paying £400k per year then if we could get someone else to build a ground for us for anywhere less than £5.7m - £8m the rent would be cheaper.

Sadly, I think the cost for building a new ground would/could be far higher than this so Kassam is only charging commercial rent.

As a fan of well over 40 years though he is certainly not doing us any great favours with the totally commercial deal we are getting - particularly with how much he cost us over the years.

The London Welsh deal is an interesting one too. If we are allowed under our lease to sub-let, then we could keep all the rent we draw from them.
From a purely commercial point of view, as a developer, you would expect a 5-7% or so yield from any build. My simple maths tells me that if we are now paying £400k per year then if we could get someone else to build a ground for us for anywhere less than £5.7m - £8m the rent would be cheaper. Sadly, I think the cost for building a new ground would/could be far higher than this so Kassam is only charging commercial rent. As a fan of well over 40 years though he is certainly not doing us any great favours with the totally commercial deal we are getting - particularly with how much he cost us over the years. The London Welsh deal is an interesting one too. If we are allowed under our lease to sub-let, then we could keep all the rent we draw from them. johnnylyle
  • Score: 2

3:39pm Thu 5 Jul 12

northampton yellow says...

why dont we threaten to leave play him at his own game then see what happens no wonder we not byeing players aint got no money.
why dont we threaten to leave play him at his own game then see what happens no wonder we not byeing players aint got no money. northampton yellow
  • Score: 0

3:43pm Thu 5 Jul 12

johnnylyle says...

The Globe Arena where Morecambe play cost around £12m and was built by Globe Construction, it has a capacity of 6,476, so ours would have to cost more or be even worse than the Kassam is now!

The difference between a stadium and almost any other building is that it has little alternative use. Without a footballing tenant, it has no value.

But we couldn't threaten unless we had somewhere else to go!
The Globe Arena where Morecambe play cost around £12m and was built by Globe Construction, it has a capacity of 6,476, so ours would have to cost more or be even worse than the Kassam is now! The difference between a stadium and almost any other building is that it has little alternative use. Without a footballing tenant, it has no value. But we couldn't threaten unless we had somewhere else to go! johnnylyle
  • Score: -1

5:09pm Thu 5 Jul 12

OxRoxBox says...

Lets hope he spends some of that money on cleaning staff for his upmarket hotel near Oxford. A friend of mine's young grandchildren found used condoms in the bedside drawers!
Lets hope he spends some of that money on cleaning staff for his upmarket hotel near Oxford. A friend of mine's young grandchildren found used condoms in the bedside drawers! OxRoxBox
  • Score: 0

6:20pm Thu 5 Jul 12

mandate says...

It makes no sense to rent the stadium for 500K per year. This is just draining the club's finances.

Supposing the club continues to rent the stadium for 15 more years, they will have effectively paid the cost of the stadium. This still leaves them as tenants and not owners.

Naturally, the big winner is Firoza (Kassam). He will have managed to have regained his cost for the stadium, and at the same time made lots of extra money from catering and functions.

It would be better for OUFC to sit down with the board members of London Welsh, and together discuss the possibilty of building a new stadium.

If a new four sided stadium with a 10-12,000 capacity was built at a cost of £18 million pounds, the club(s) would be repaying together approx 800k per year, on a 30 year loan.

This would be 300k more than what they are already paying to rent the stadium, but they would then have sole control of the profits made from catering and functions at the ground. They would have to make profits of approx. £5,000 per game on catering to cover the extra revenue needed to cover the stadium loan.

Alternatively, financing of a new stadium could be partly funded by offering sponsorship deals to companies to name the ground or stands after themselves. Let's just imagine that BMW were interested, the stadium or one of the stands could be named after them if they were prepared to help finance the ground. I'm certin that both London Welsh and Oxford United have good marketing potential.

The Kassam deal for me is a complete rip-off. We should not be paying so much money for a 3 sided ground. Oxford United and London Welsh should at the very least make Kassam build the 4th stand.
It makes no sense to rent the stadium for 500K per year. This is just draining the club's finances. Supposing the club continues to rent the stadium for 15 more years, they will have effectively paid the cost of the stadium. This still leaves them as tenants and not owners. Naturally, the big winner is Firoza (Kassam). He will have managed to have regained his cost for the stadium, and at the same time made lots of extra money from catering and functions. It would be better for OUFC to sit down with the board members of London Welsh, and together discuss the possibilty of building a new stadium. If a new four sided stadium with a 10-12,000 capacity was built at a cost of £18 million pounds, the club(s) would be repaying together approx 800k per year, on a 30 year loan. This would be 300k more than what they are already paying to rent the stadium, but they would then have sole control of the profits made from catering and functions at the ground. They would have to make profits of approx. £5,000 per game on catering to cover the extra revenue needed to cover the stadium loan. Alternatively, financing of a new stadium could be partly funded by offering sponsorship deals to companies to name the ground or stands after themselves. Let's just imagine that BMW were interested, the stadium or one of the stands could be named after them if they were prepared to help finance the ground. I'm certin that both London Welsh and Oxford United have good marketing potential. The Kassam deal for me is a complete rip-off. We should not be paying so much money for a 3 sided ground. Oxford United and London Welsh should at the very least make Kassam build the 4th stand. mandate
  • Score: 4

6:22pm Thu 5 Jul 12

BenkiuGuasu says...

I do like the idea of moving out.... I have never liked the Kassam, and I don't even think I would like it with 4 stands. It's soulless, and windy.

So, could we maybe move out? Where to? We struggled for years to find a location last time round - it isn't an easy one at all.

Perhaps we could join forces with Oxford City, and rebuild the stadium. They certainly have a plot of land big enough. I know it's not ideal and has its disadvantages like traffic and whatnot... But it's an idea.... A ground with soul....oh for a ground with soul....

Stayed at the manor...we shoulda stayed at the manor....stayed at the maaaanoooorrrr......
. and such and so....
I do like the idea of moving out.... I have never liked the Kassam, and I don't even think I would like it with 4 stands. It's soulless, and windy. So, could we maybe move out? Where to? We struggled for years to find a location last time round - it isn't an easy one at all. Perhaps we could join forces with Oxford City, and rebuild the stadium. They certainly have a plot of land big enough. I know it's not ideal and has its disadvantages like traffic and whatnot... But it's an idea.... A ground with soul....oh for a ground with soul.... Stayed at the manor...we shoulda stayed at the manor....stayed at the maaaanoooorrrr...... . and such and so.... BenkiuGuasu
  • Score: 4

6:39pm Thu 5 Jul 12

johnnylyle says...

mandate wrote:
It makes no sense to rent the stadium for 500K per year. This is just draining the club's finances.

Supposing the club continues to rent the stadium for 15 more years, they will have effectively paid the cost of the stadium. This still leaves them as tenants and not owners.

Naturally, the big winner is Firoza (Kassam). He will have managed to have regained his cost for the stadium, and at the same time made lots of extra money from catering and functions.

It would be better for OUFC to sit down with the board members of London Welsh, and together discuss the possibilty of building a new stadium.

If a new four sided stadium with a 10-12,000 capacity was built at a cost of £18 million pounds, the club(s) would be repaying together approx 800k per year, on a 30 year loan.

This would be 300k more than what they are already paying to rent the stadium, but they would then have sole control of the profits made from catering and functions at the ground. They would have to make profits of approx. £5,000 per game on catering to cover the extra revenue needed to cover the stadium loan.

Alternatively, financing of a new stadium could be partly funded by offering sponsorship deals to companies to name the ground or stands after themselves. Let's just imagine that BMW were interested, the stadium or one of the stands could be named after them if they were prepared to help finance the ground. I'm certin that both London Welsh and Oxford United have good marketing potential.

The Kassam deal for me is a complete rip-off. We should not be paying so much money for a 3 sided ground. Oxford United and London Welsh should at the very least make Kassam build the 4th stand.
I think you're right. A ground share would make the figure great value for us too. Mr Branson, would you like to lend the club £18mill on a no interest 30 year loan?

And I also agree with BenkiuGuasu, there has never been any Soul at the Kassam, because it is designed to be built as cheaply and efficiently as possible so the atmosphere just blows right through the ground.
[quote][p][bold]mandate[/bold] wrote: It makes no sense to rent the stadium for 500K per year. This is just draining the club's finances. Supposing the club continues to rent the stadium for 15 more years, they will have effectively paid the cost of the stadium. This still leaves them as tenants and not owners. Naturally, the big winner is Firoza (Kassam). He will have managed to have regained his cost for the stadium, and at the same time made lots of extra money from catering and functions. It would be better for OUFC to sit down with the board members of London Welsh, and together discuss the possibilty of building a new stadium. If a new four sided stadium with a 10-12,000 capacity was built at a cost of £18 million pounds, the club(s) would be repaying together approx 800k per year, on a 30 year loan. This would be 300k more than what they are already paying to rent the stadium, but they would then have sole control of the profits made from catering and functions at the ground. They would have to make profits of approx. £5,000 per game on catering to cover the extra revenue needed to cover the stadium loan. Alternatively, financing of a new stadium could be partly funded by offering sponsorship deals to companies to name the ground or stands after themselves. Let's just imagine that BMW were interested, the stadium or one of the stands could be named after them if they were prepared to help finance the ground. I'm certin that both London Welsh and Oxford United have good marketing potential. The Kassam deal for me is a complete rip-off. We should not be paying so much money for a 3 sided ground. Oxford United and London Welsh should at the very least make Kassam build the 4th stand.[/p][/quote]I think you're right. A ground share would make the figure great value for us too. Mr Branson, would you like to lend the club £18mill on a no interest 30 year loan? And I also agree with BenkiuGuasu, there has never been any Soul at the Kassam, because it is designed to be built as cheaply and efficiently as possible so the atmosphere just blows right through the ground. johnnylyle
  • Score: 1

8:25pm Thu 5 Jul 12

make mine a double says...

who signed the lease and where are they now ? totally ripped off!!
who signed the lease and where are they now ? totally ripped off!! make mine a double
  • Score: 1

9:05pm Thu 5 Jul 12

MadMan-JaYmZ says...

Kassam is a ****, always has been in it for the money, i worked for a company in one of the retail outlets, and the roof was damaged and he made the tenant pay even though he is the landlord.

Cheap ****, oxford need to get out that stadium or get a better deal !
Kassam is a ****, always has been in it for the money, i worked for a company in one of the retail outlets, and the roof was damaged and he made the tenant pay even though he is the landlord. Cheap ****, oxford need to get out that stadium or get a better deal ! MadMan-JaYmZ
  • Score: 1

10:18pm Thu 5 Jul 12

manorforever says...

kassam is a c... if he had the best intreast of the club in mind he would sell the ground. we dont need him, he can go and buy rangers instead!!!!!!!!!!!!!
!
kassam is a c... if he had the best intreast of the club in mind he would sell the ground. we dont need him, he can go and buy rangers instead!!!!!!!!!!!!! ! manorforever
  • Score: 1

10:11am Fri 6 Jul 12

camden says...

Kassam is doing the same as every other landlord in the country. He has an asset and will seek to obtain the highest rental per year for that asset as possible. He now has two tenants for his poorly equiped three sided botch job of a stadium. If Oxford United feel the rent charges are excessive they have the option to terminate their lease. Kassam will not care in the least as London Welsh will continue to pay him a rent.
Oxford United have four options
1. Terminate the agreement with Kassam and rent somewhere else. (Oxford City, Wycombe Wanderers, Didcot Town etc).
2. Terminate the agreement with Kassam and seek to find new investment/owners to finance and build a new stadium.
3. Stay where they are, continuing to pay rental to kassam whilst seeking new investment/owners with the finances to purchase and COMPLETE the stadium.
4.Stay where they are, continuing to pay rental to kassam and nothing else.
Kassam is doing the same as every other landlord in the country. He has an asset and will seek to obtain the highest rental per year for that asset as possible. He now has two tenants for his poorly equiped three sided botch job of a stadium. If Oxford United feel the rent charges are excessive they have the option to terminate their lease. Kassam will not care in the least as London Welsh will continue to pay him a rent. Oxford United have four options 1. Terminate the agreement with Kassam and rent somewhere else. (Oxford City, Wycombe Wanderers, Didcot Town etc). 2. Terminate the agreement with Kassam and seek to find new investment/owners to finance and build a new stadium. 3. Stay where they are, continuing to pay rental to kassam whilst seeking new investment/owners with the finances to purchase and COMPLETE the stadium. 4.Stay where they are, continuing to pay rental to kassam and nothing else. camden
  • Score: 1

10:41am Fri 6 Jul 12

the wizard says...

The thing is, if you lot were to move out and take LW with you, Kassam would have an empty stadium generating no money.
Time for re negotiation of rent don't you think ? and then look for somewhere else anyway.
The thing is, if you lot were to move out and take LW with you, Kassam would have an empty stadium generating no money. Time for re negotiation of rent don't you think ? and then look for somewhere else anyway. the wizard
  • Score: 1

11:30am Fri 6 Jul 12

Joe1 says...

re sharing ldn welsh. i can recall when i toured the stadium being told "NOT TO STAND ON THE PITCH". WHAT WILL ALL THOSE RUGBY GUYS DO TO THE PITCH?
re sharing ldn welsh. i can recall when i toured the stadium being told "NOT TO STAND ON THE PITCH". WHAT WILL ALL THOSE RUGBY GUYS DO TO THE PITCH? Joe1
  • Score: 1

12:54pm Fri 6 Jul 12

winger whitley says...

Those rugby guys will churn it into a pitch where only a long ball game will work. Forget the financial issues a minute, the cost in footballing terms is a pitch like Watford's of Wycombe's. Wigan and Reading are obvious exceptions, but they have the resources to keep the pitch well looked after.
Those rugby guys will churn it into a pitch where only a long ball game will work. Forget the financial issues a minute, the cost in footballing terms is a pitch like Watford's of Wycombe's. Wigan and Reading are obvious exceptions, but they have the resources to keep the pitch well looked after. winger whitley
  • Score: 1

4:20pm Fri 6 Jul 12

maximillion6665 says...

I'll tell you what would be great...if someone (Lenagan, Thomas or whoever) could actually speak out for once and tell us all what decisions and why these decisions have been made....

There must be a good reason for choosing to keep paying this rediculous rent, but why?
I'll tell you what would be great...if someone (Lenagan, Thomas or whoever) could actually speak out for once and tell us all what decisions and why these decisions have been made.... There must be a good reason for choosing to keep paying this rediculous rent, but why? maximillion6665
  • Score: 1

7:40pm Fri 6 Jul 12

yellowhoods says...

Kassam your a legend!!!!!!!!!!!
Kassam your a legend!!!!!!!!!!! yellowhoods
  • Score: -1

8:47pm Fri 6 Jul 12

stephen burrows says...

I was living in France when all the mistakes were made by the OUFC directors which let in FK. These blunders were a strategic disaster. When I visited the new stadium (from London) I found it sad. It is even sadder with FK's financial drain on the club. New options need to be considered. Being bled indefinitely by Kassam really has to be avoided and cannot be allowed.
I was living in France when all the mistakes were made by the OUFC directors which let in FK. These blunders were a strategic disaster. When I visited the new stadium (from London) I found it sad. It is even sadder with FK's financial drain on the club. New options need to be considered. Being bled indefinitely by Kassam really has to be avoided and cannot be allowed. stephen burrows
  • Score: 1

9:45pm Fri 6 Jul 12

Simon84 says...

When Merry and lenagan first took over they promised they would have the stadium sorted in the summer they took over a few months before the end of the season if i remember rightly. Nothing came of it they have always said the asking price was too much, I believe when they took over they were quoted a price of 12m in the summer it was still 12m, so why didn't they buy it?

Can you really blame Kassam for doing what he is doing he got two idiots (Lenagan & Merry) to sign a one sided lease is that so wrong?

Yes we can blame Kassam all we want but the people who are really to blame are Lenagan and Merry they got us into this mess and are not prepared or in a position to sort it.
When Merry and lenagan first took over they promised they would have the stadium sorted in the summer they took over a few months before the end of the season if i remember rightly. Nothing came of it they have always said the asking price was too much, I believe when they took over they were quoted a price of 12m in the summer it was still 12m, so why didn't they buy it? Can you really blame Kassam for doing what he is doing he got two idiots (Lenagan & Merry) to sign a one sided lease is that so wrong? Yes we can blame Kassam all we want but the people who are really to blame are Lenagan and Merry they got us into this mess and are not prepared or in a position to sort it. Simon84
  • Score: 1

12:42pm Sat 7 Jul 12

mandate says...

Richard Branson would be the perfect purchaser of the stadium. Sir Richard has local connections to Oxford, and his daughter Holly is a keen Oxford United fan.

The 'Bransom' stadium would be a great legacy to him (better than a statue). He could even purchase it for his daughter and name it the Holly Branson stadium.

So, if you're interested in making the loyal fans at Oxford extremely happy, please take us onboard sir Richard. There would probably even be a few quid in it for you, if you were take on this new business venture.
Richard Branson would be the perfect purchaser of the stadium. Sir Richard has local connections to Oxford, and his daughter Holly is a keen Oxford United fan. The 'Bransom' stadium would be a great legacy to him (better than a statue). He could even purchase it for his daughter and name it the Holly Branson stadium. So, if you're interested in making the loyal fans at Oxford extremely happy, please take us onboard sir Richard. There would probably even be a few quid in it for you, if you were take on this new business venture. mandate
  • Score: 0

1:11pm Sat 7 Jul 12

mandate says...

As an afterthought to my Richard Branson stadium purchsae comment.
Here is a free business and marketing strategy plan for you Richard.

Virgin Airlines establish new flight routes from Oxford -London Airport. At the same time you promote this new venture by buying out Lenegans share at Oxford United.

You then buy and rename the Kassam stadium to the Virgin or Branson stadium. You give Oxford United and London Welsh a major sponsorship deal, wherby they both proudly promote your brandname at the stadium and on their shirts.

This would neatly tie up the fact that you now fly from Oxford-London Airport, because you are promoting OXFORD United and LONDON Welsh.
As an afterthought to my Richard Branson stadium purchsae comment. Here is a free business and marketing strategy plan for you Richard. Virgin Airlines establish new flight routes from Oxford -London Airport. At the same time you promote this new venture by buying out Lenegans share at Oxford United. You then buy and rename the Kassam stadium to the Virgin or Branson stadium. You give Oxford United and London Welsh a major sponsorship deal, wherby they both proudly promote your brandname at the stadium and on their shirts. This would neatly tie up the fact that you now fly from Oxford-London Airport, because you are promoting OXFORD United and LONDON Welsh. mandate
  • Score: 0

4:22pm Sun 8 Jul 12

mattyproper77 says...

Interesting times.

It looks like some open, transparent assessment of the financial viability of the various options open to OUFC should be made.

Obviously have to use the head not the heart, but it would feel so, so sweet to walk away from that albatross stadium and basically start again.

OUFC is in our hearts, it will always exist, so it doesn't matter where we play or where we 'start again' from.

I also don't think FK can be blamed too much, he is spiritually sick and feels absolutely no connection to his fellow man, he is under the delusion that ££££ will make him happy (and seeing as he came from poverty, this is perhaps unsurprising). This whole tragedy is partly of our making, and stretches back to the mid-1980s at least.

Whatever happened to Robin Herd?
Interesting times. It looks like some open, transparent assessment of the financial viability of the various options open to OUFC should be made. Obviously have to use the head not the heart, but it would feel so, so sweet to walk away from that albatross stadium and basically start again. OUFC is in our hearts, it will always exist, so it doesn't matter where we play or where we 'start again' from. I also don't think FK can be blamed too much, he is spiritually sick and feels absolutely no connection to his fellow man, he is under the delusion that ££££ will make him happy (and seeing as he came from poverty, this is perhaps unsurprising). This whole tragedy is partly of our making, and stretches back to the mid-1980s at least. Whatever happened to Robin Herd? mattyproper77
  • Score: 0

11:06pm Sun 8 Jul 12

Andrew:Oxford says...

First speak to English Heritage and the County Council & Chiltern Railways...

Rebuild Water Eaton Park & Ride as a multi-storey car-park with more spaces than there are currently.

Build a new Stadium at Water Eaton with one of the stands backing onto the derelict grain-store in a sympathetic and aesthetically pleasing manner.

This would mean a new stadium, with a railway station on the national network, bringing a heritage property back up to standard for an alternative use and more effective use of parking spaces with games tending to be held when commuter use of Water Eaton P&R is at a minimum.

Should also be better for corporate events too!

Just off M40, 1000s of parking spaces, (hopefully) direct access by fast train from London, Milton Keynes, Oxford, Reading.

Football itself is a tiny proportion of an income from this kind of asset.
First speak to English Heritage and the County Council & Chiltern Railways... Rebuild Water Eaton Park & Ride as a multi-storey car-park with more spaces than there are currently. Build a new Stadium at Water Eaton with one of the stands backing onto the derelict grain-store in a sympathetic and aesthetically pleasing manner. This would mean a new stadium, with a railway station on the national network, bringing a heritage property back up to standard for an alternative use and more effective use of parking spaces with games tending to be held when commuter use of Water Eaton P&R is at a minimum. Should also be better for corporate events too! Just off M40, 1000s of parking spaces, (hopefully) direct access by fast train from London, Milton Keynes, Oxford, Reading. Football itself is a tiny proportion of an income from this kind of asset. Andrew:Oxford
  • Score: 3

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