According to their accounts, the SMC made a loss of £33k from its day to day running of City, Hull, Airco and "others".
A surprising loss when you consider the success City is having at the moment, especially compared with 10 years ago.
Even more surprising, you might say, are FC's massive costs.
However, the real debt comes from the RBS mortgage, new pitch, floodlights etc, which are all being funded, it seems, by loans from Mr Allam.
To put it another way, the SMC didn't make enough profit to contribute anything towards these "extras".
Makes you wonder, doesn't it.

If the council buy the SMC and put it into liquidation shortly afterwards it may well be fraud. Leaving the directors appointed by the council open to a criminal prosecution and any councillors that voted for such a strategy to personally pay for the losses that would follow.

The SMC's last accounts (2014) show about £2 million owed to the RBS under the terms of the guarantee given to its holding company and over £6 million to Hull City Tigers Limited.

Even with the costs of an ageing ground that needs repairs, it should be easy to make a profit on a ground that has minimum crowds of 23k and 10k for football and rugby every other week almost year round, that is a lot of overpriced beer and food, and bigger crowds than say the John Smith's and DW stadiums get for the same sports and they are older grounds. That's before you add in extra events like business expo's one off international sports ties, functions in the bars, the infamous polo and squash contests...

If you were starting from scratch, most probably. But with tenancy agreements that were written to work for clubs who at the time were not getting those numbers through the gates, it isn't so straightforward. Which is why it wasn't attractive to a normal, independent SMC, and City took it on instead.
While all partial accounts must be taken with a pinch of salt, it has never been a gold mine. FC aren't really in a position to pay more, and neither they nor City have an incentive to.
Comparisons with other stadiums will be difficult because deals are structured in different ways. Is the John Smith's the current name of the MacAlpine/Galpharm? Hudds own a share of that iirc. And while Hull certainly pay a lot, the SMC covers covers stuff like stewarding iirc, which may not be the case everywhere. I don't think Rovers get it under the famous peppercorn rental agreement. Could be wrong, often am.
All that said, if you want to test your theory and earn £60k pa...

But isn't having Larger crowds a benefit to the SMC not the clubs? (as I understand it...)

Me to what we need is a full audit so while on about the Air-cool Arena the council should demand this at same time as Allams not forth coming when asked when they wanted to offload it for £1 to the Council.

Hello Man-in-the-sand, and welcome.

Thanks for answering my question - it's impossible to the council to legally take over the SMC and immediately liquidate knowing the financial situation.

I guess its a similar situation as to when Allam expected to be gifted the stadium and objected to the council's refusal - there are personal as well as moral and legal implications for the councillors.

I know the last SMC accounts to 2014 showed the RBS debt as still outstanding. Allam has gone on record as saying this debt has been repaid - is that since the last account submission or is he once again waxing lyrical for the media?

I understand the current SMC debt remains (approx) £2M to the bank and £4M to Allam himself. Am I correct?

And (sorry to bombard), but do you think there are sufficient grounds to terminate the SMC lease. this is the woolly point I can't believe Allam would leave himself exposed to. I'm of the belief he knows his lawyers are good enough to prove compliance.

. Just my hunch, from observation of his previous...

I think Mr Allam's trump card is the fact that the council (allegedly) allowed Bartlett to mortgage the SMC to the tune of £4m, which, in effect, allows any owner of the SMC to indebt the company for any amount, despite the fact that it has no tangible assets.
The SMC accounts suggest to me that Mr Allam has made sure that the SMC owes him as much as is possible.
How he's done this, I'm sure, is perfectly legal and above board.

If and when he goes, all these debts will be paid off by the new incumbent , and he won't have paid for anything.

Yep (again!). People think he's out-of-touch and oblivious. Rubbish. He's extremely astute and clever. I think he will "win".

... I edited the last sentence of my last post while you were replying....

Am I missing the point here?

IF the council found that the SMC has broken the terms of the lease enough can the council not just take back the assets? Why would they need the SMC?

It's not a case of taking over the SMC that is a company set up by Adam that was awarded the contract for the FM of the facilities, The council do not need to take over the SMC, the key to this is the FM contract, The council, if they were to win in court then would just cancel the contract and re award it, the debt to the company is an irrelevance, the value is the contract which cannot have debt attached, one senario is that should the SMC lose the contract, then it would be quite legal say for instance for Adam to set up a new FM company to manage the re submitted contract

. and the Allams would still have absolute control of the SMC with no contract or assets just debt and unable to do anything about the facilities.

That sounds great to me

Sounds like a great outcome just can not believe it is this easy...

Well, the way you've just described it couldn't be simpler. Here's hoping for a (the) simple solution.

Apologies for mixing up the answers, but my brain is fried.

I think the mortgages Assem Allam said he repaid were those Bartlett obtained on Hull City's future ticket sales and maybe the parachute payments. I don't remember him saying anything about the RBS loan when he bought the club.

There is an agreement to pay the £2 million to RBS over 3 years. This is reported in the accounts. I'd be surprised if he'd paid it off.

Assem Allam isn't shown as a creditor in the SMC accounts. Only Hull City Tigers Limited. The debt to Hull City Tigers Limited is well over £6 million.

I think there is evidence he is in fundamental breach of the lease. There are three main parts to the lease, the KC, the Arena and the profit sharing. The SMC didn't have to pay rent and get to keep most of the profits from the KC in return for allowing the community to use the Arena at roughly the same rates as the Council would charge. What the Allams have done is a fundamental breach in my view.

I'm not sure how good his solicitors are. Both Barmby and Bullard agreed to settlements with a gagging clause so we don't know how much he had to pay out to them. Bullard's contract with Ipswich Town would have reduced any settlement significantly.

Barmby's father took him on and won. He threatened RBS and backtracked.

On all the major points the arbitration found in favour of the FA. If Malcolm Clark had declared an interest at the Membership Committee meeting he'd have lost the arbitration appeal. I think finding in his favour was a fig leaf so he didn't have to keep his promise to sell within 24 hours. We'll see what happens this time.

I'd be surprised if the Council terminate the tenancy. They would be better getting an order to restore the Arena to its previous state on the grounds that its a fundamental breach. If the SMC then failed to comply the Council would have a court order on which to base any termination of the lease.

Time for a cup of tea.

On the highlighted point, the SMC is an appointed contractor to manage a facility. In the event of a breach which qualifies as a termination trigger, if, for example, the council could terminate and simply appoint an alternative operator who has previous experience of running the facility, why would they fanny about with the existing operator who's agenda is to cause trouble and difficulties at every verse-end?

The SMC is not an appointed contractor but a leaseholder. This gives them additional legal rights which a contractor wouldn't have. The Council have to show the SMC is in breach of a fundamental term of the lease. If they do can show that then yes they can terminate the lease. Once the lease is terminated the Council are in charge of running the KC and the Arena. The Council may not want that responsibility and hope they can do a deal with Assem Allam.

Wrong choice of term, but the same substantive impact. Why could the council not grant the lease to another more consistent party within a short period? Surely terminating the SMC deal doesn't mean the council have to run the stadium and arena themselves?

No, but it leaves them open to a legal challenge from allam and potential financial damages if they lost

Wrong in every respect and betraying a fundamental misunderstanding of both company and criminal law. If the council had any sense and were properly advised they would do a deal with RBS and call out Hull City Tigers Limited whom I very much doubt would want their conduct to be scrutinised in court.

[url=http://www.allamout.co.uk/interesting website[/url popular guy

Not sure what you mean here. Clearly legal process on establishing breach of contract would be the first step. If successful, the council could terminate the lease. Then appoint a new entity to the head lease. What financial damages would the Allams claim if "the SMC is loss-making", surely the council would be doing them a favour?

Are you being your usual obtuse self or do you genuinely not understand?

What I'm saying is if step one is proving in court there's a breach that triggers termination, and that is successful, what would the Allams' grounds for legal action and financial compensation be?