Dave Cahill wrote:They might. But as things stand, next year our commercial revenue is down 27%. For us to even see a 1% increase in that revenue, the total revenue has to increase 28%. Thats a sizeable increase.
Assuming the structure of the deal is as you describe, this isn't really accurate. We have 27% of anticipated next years revenue up-front from CVC. So if revenues remain static, it's a wash - except that the clubs received 27% up front and 73% in the following years. And they should account for it that way - spread as income over the lifetime of the deal as opposed to a one-off windfall in year 1 and 27% reduction in revenue in the following years (though seeing some of the commentary on-line I'm not sure people understand that).
So if overall revenue increases by 1%, CVC will get 27% and the clubs get 73%. So for the clubs to see a 1% increase in revenue, there needs to be a 1.36% increase in overall revenue (1.36 * 0.73) = 1
Of course - if some clubs went and splashed the initial payment on Teddy's ice cream in the first year, then they are going to feel a lot of pain in the following years
I like your right leg. A lovely leg for the role.
I've got nothing against your right leg.
The trouble is ... neither have you