CIE bosses sign deal for a €1m sporting box

Tabnabs

Ah you gotta laugh...

CIE bosses sign deal for a €1m sporting box

As workers in Dublin Bus and Bus Eireann are laid off, CIE take up a corporate perk at Lansdowne Road

Tom Lyons and Jan Battles

CIE, which is laying off 600 workers in Dublin Bus and Bus Eireann, has accepted a 10-year executive box worth more than €1m at the revamped Lansdowne Road, as part-payment for “air rights” above the rail track that runs under the stadium.

The 12-seat corporate perk is likely to anger workers, who are considering strike action over the proposed job cuts. The cash-strapped semi-state company expects to lose up to €90m in 2009 unless it makes spending cuts.

The corporate box which CIE describes as being “in a non-prime corner position” can be used for all international football and rugby matches. It will not entitle CIE to attend rock concerts or other events in the stadium.

There are just 10 12-seater boxes in the new Lansdowne Road. John Delaney, chief executive of the Football Association of Ireland (FAI), has described the standard as “second to none”.

The Lansdowne Road Stadium Development Company (LRSDC), which is responsible for building the new sports venue, handed over the free corporate box as part payment to secure the “air rights” over the railway line adjacent to the stadium.

CIE said: “As the development of the stadium required the air rights over the line, an agreement was reached which provided for an ongoing licence fee payable to CIE, advertising space within the stadium, and a corporate box.” It declined to give the amount of the licence fee or to comment on how long its rights to the box lasted, citing “commercial confidentiality”.

Tommy Broughan, Labour party spokesman on transport, said: “It’s totally inappropriate given the recent discussions we’ve had with bodies like the public accounts committee in relation to Fas and other state agencies and commercial state bodies. It sends out the wrong signals to the workforce and consumers in these hard-pressed times.

“State agencies and commercial semi-state bodies need to leave behind the whole culture of big business, which since the middle of 2008 has come a cropper with the appalling and outrageous behaviour we’ve seen in the major banks. Our state enterprise bodies shouldn’t engage in that type of corporate behaviour.”

Siptu, which represents drivers in Dublin Bus, Bus Eireann and Irish Rail, said CIE should have taken cash instead of the perk. “The money could have been a lot better spent on maintaining public transport services,” said Padraig Yeates, a spokesman.

“If there was a payment due, surely it would be better to use it to keep extra buses on the road rather than this sort of extravagant expenditure, especially at a time like this.”

CIE defended its decision. “The corporate box can be used by staff and customers or, as in the case of a similar arrangement with Croke Park in relation to air rights over the Canal End, we can lease it back to the stadium to provide a further income stream to the company,” it said.

The LRSDC declined to comment.

http://www.timesonline.co.uk/tol/news/world/ireland/article5581700.ece

Gary ITR

This is just sensationalism, sure they got the thing for nothing

murphaph

K-Jet wrote: »

This is just sensationalism, sure they got the thing for nothing

Not true! They exchanged air rights for it. They could have said "cash only" or if they'd already signed a deal in 'better times' that the box was included in, they could have clarified their position and stated that the box will be sold.

Ham'nd'egger

murphaph wrote: »

Not true! They exchanged air rights for it. They could have said "cash only" or if they'd already signed a deal in 'better times' that the box was included in, they could have clarified their position and stated that the box will be sold.

Certainly they could take cash for it but there is much use to be made of a corporate facility at a ground such as this. Boxes such as these are invaluable marketing tools and are worth their weight in gold. I also note that CIE do get some money for the "Air Rights" and advertisement space in the stadium so it isn't the throwaway deal that it is made out to be.

Many companies who take on boxes at sports stadia worldwide use tickets either for corporate entertainment or as prices for internal gifts for staff and external promotions for customers (Thinking of banks that offer GAA or rugby tickets or phone companies here) that are very popular, especially when hot matches are coming up.

zagmund

Well, given that CIE seem to be dismantling everything but passenger trains their only remaining customers shortly are going to be passengers like you and me. They won't be needing that box for schmoo....erm, entertaining large potential freight customers in the future, so I reckon they must have it lined up for schmoo...erm, entertaining customers.

I'm first in the line.

z

grahamo

It would be nice if they ran promotional competitions and gave customers who win the chance to sit in the box on matchdays but you just know the box will be used by the top CIE boys as a 'perk'

KevR

Sorry for sounding a bit thick but what are "air rights"?

dub_commuter

Hamndegger wrote: »

Certainly they could take cash for it but there is much use to be made of a corporate facility at a ground such as this. Boxes such as these are invaluable marketing tools and are worth their weight in gold. I also note that CIE do get some money for the "Air Rights" and advertisement space in the stadium so it isn't the throwaway deal that it is made out to be.

If CIE were not in financial crisis then I would agree. But they are and they are currently trading at a big loss, whilst long term is good, the shot term is the thing they need to worry about right now, no sensibly run business making such a loss would want tokens or facilities such as this, they would owe it to their creditors and their shareholders to secure as much capital as possible in the short term to enable them to keep trading as well as possible.

markpb

KevR wrote: »

Sorry for sounding a bit thick but what are "air rights"?

The right to build above land owned by another person. In this case, one of the Lansdowne stands extends over the Dart line so they need to pay for the air rights. I'm not sure why this is an issue since the old stand was over the Dart line, why would they need to purchase the air rights again?

Ham'nd'egger

markpb wrote: »

The right to build above land owned by another person. In this case, one of the Lansdowne stands extends over the Dart line so they need to pay for the air rights. I'm not sure why this is an issue since the old stand was over the Dart line, why would they need to purchase the air rights again?

The old rights were just a rental agreement. There was also disruption to the line in relation to the demolition and rebuilding of the new station so there is some element of compensation involved.

Ham'nd'egger

dub_commuter wrote: »

If CIE were not in financial crisis then I would agree. But they are and they are currently trading at a big loss, whilst long term is good, the shot term is the thing they need to worry about right now, no sensibly run business making such a loss would want tokens or facilities such as this, they would owe it to their creditors and their shareholders to secure as much capital as possible in the short term to enable them to keep trading as well as possible.

I take your point but corporate entertainment facilities do pay back their way over time in goodwill and PR value.

Then we have to bear in mind here that media inflation is probably involved with the prices here

paulm17781

Hamndegger wrote: »

I take your point but corporate entertainment facilities do pay back their way over time in goodwill and PR value.

Then we have to bear in mind here that media inflation is probably involved with the prices here

What was CIE groups' turnover this year? What's it forecast to be next year? How many people are they letting go (in total)? Why do a semi-state need a corporate box valued at 1M?

Ham'nd'egger

paulm17781 wrote: »

What was CIE groups' turnover this year? What's it forecast to be next year? How many people are they letting go (in total)? Why do a semi-state need a corporate box valued at 1M?

Paul, I am not actually defending their getting this box that they have not actually had to pay for in addition to being given money from the IRFU; they are getting it for FREE. I am saying that corporate boxes such as these tend to cover their costs and have far more uses and perks than one thinks about.

murphaph

Hamndegger wrote: »

I take your point but corporate entertainment facilities do pay back their way over time in goodwill and PR value.

What in the name of God do a state transport company need with corporate entertainment facilities? Give me a break. :rolleyes:

paulm17781

murphaph wrote: »

What in the name of God do a state transport company need with corporate entertainment facilities? Give me a break. :rolleyes:

Thank you, that is what I was getting at.

Nostradamus

murphaph wrote: »

What in the name of God do a state transport company need with corporate entertainment facilities? Give me a break. :rolleyes:

Takes their minds off running trains and buses.

Alun

murphaph wrote: »

What in the name of God do a state transport company need with corporate entertainment facilities? Give me a break. :rolleyes:

Exactly. If it was Intel, maybe, but not CIE. Utterly ridiculous.

John_C

Is this not just a big piece of circular reasoning?

We seem to be arguing that the Government should have paid an extra million to build the stadium so that CIE could recieve that extra million for air rights and report to their shareholders (the government) a loss of 1 million less.

Ham'nd'egger

murphaph wrote: »

What in the name of God do a state transport company need with corporate entertainment facilities? Give me a break. :rolleyes:

The three CIE companies have plenty of commercial contracts going for grabs both inwards and outwards at any one time so I am sure they will find use for them; almost all big company do likewise. Some people seem to think that CIE have paid for this; they have been given this facility for free so it isn't costing them anything. It is unlikely to assume they would have paid for it were it not offered for free.

The alternative is they can bring them all into the Rail Gourmet cafe for a €3 bag of crisps and tepid coffee

zagmund

If CIE are going out to tender for the supply of new rolling stock, ticket machines, light bulbs, whatever then (to some degree) let the vendors entertain the hob nobs in *their* corporate box.

I can't see any good reason why CIE would need to entertain customers like this - it's not like they are seeking to attract new customers.

I know they didn't pay €1m to get the facility, but on the flip side, they also didn't get €1m in cash for the rights either.

If I was a CIE employee who was facing cuts or redundancy because the company was losing money I don't think I would be impressed that my employers didn't take €1m in readies that they could have got and went instead for an entertainment facility that will be enjoyed by a relatively small number of employees of the companies.

z

Davidth88

Guys a box like this are a valuable asset. ( otherwise no one would lease them)

Believe me companies don't purchase leases on these just because they are nice perks.

Used correctly this would be a powerful marketing tool , after all don't CIE do loads of work carting American tourists around , they need to entertain the travel companies and show Ireland off in the best light .

I am sure they would never have got 1million cash for the ' air rights ' , so this was a great alternative .

On the face of it ( and the way it's reported ) it looks terrible but we all know the truth never gets in the way of a good story.


BTW , I have nothing to do with CIE, and would normally be the first in the line to slag them, but on this occasion ......

BrianD

Much ado about nothing. Landsdowne arleady have the "air rights" and getting a €1m box for nothing is a very fair deal. They were never going to get the cash.

I know that box holders at the other stadium frequently sub let their boxes to event companies so there is a possible revenue to be earned by the company. Having said that they should have got the non-IRFU events thrown i.e. concerts. It's a tad cheeky that the IRFU don't include these for something that costs €1m!

Carawaystick

zagmund wrote: »

If CIE are going out to tender for the supply of new rolling stock, ticket machines, light bulbs, whatever then (to some degree) let the vendors entertain the hob nobs in *their* corporate box.

I can't see any good reason why CIE would need to entertain customers like this - it's not like they are seeking to attract new customers.

I know they didn't pay €1m to get the facility, but on the flip side, they also didn't get €1m in cash for the rights either.

If I was a CIE employee who was facing cuts or redundancy because the company was losing money I don't think I would be impressed that my employers didn't take €1m in readies that they could have got and went instead for an entertainment facility that will be enjoyed by a relatively small number of employees of the companies.

z

If I was a CIE customer who was facing cuts in services because the companies are loosing money cos cie refused the cash, I don't think I'd be impressed. Oh Wait.

Quint

Davidth88 wrote: »

Used correctly this would be a powerful marketing tool , after all don't CIE do loads of work carting American tourists around , they need to entertain the travel companies and show Ireland off in the best light

...but realisticly it'll be used by a load of senior managers in CIE

lostexpectation

cie should be able to their business without giving bigwigs a coroporate box for match.

dowlingm

Enough pressure would force CIE to divest this ridiculous perk.

http://www.nytimes.com/2009/01/07/nyregion/07stadium.html

After intense criticism, the Bloomberg administration has given up a perk it worked fervently to secure: a free luxury suite at the new Yankee Stadium.

Bluetonic

This is the area we're talking about for those who don't know.

Area over the rail line, which will be used as a podium.

Bluetonic

BrianD wrote: »

Having said that they should have got the non-IRFU events thrown i.e. concerts. It's a tad cheeky that the IRFU don't include these for something that costs €1m!

Anyone renting the stadium will want a clean stadium. Regardless it's not solely an IRFU decision anymore in that they don't own the stadium, but are part of a group along with the FAI and the Government who own the stadium. The IRFU will now pay rent into the company to use the stadium, similar to the FAI. The IRFU remain sole owners of the land.

shltter

murphaph wrote: »

What in the name of God do a state transport company need with corporate entertainment facilities? Give me a break. :rolleyes:

That depends on what it is used for if it is used for Board Members and Senior Managers then that would be a waste.

However if it is leased to other companies to use and provides a revenue stream for CIE then its a very shrewd piece of business.

An ongoing revenue stream is going to be worth far more than a one off Payment.

lostexpectation

cie is not in the sports industry.

GerardKeating

lostexpectation wrote: »

cie is not in the sports industry.

But they are in the tourism industry...

zagmund

Lads, lads, lads . . . CIE may be in the tourism business, but let's get back to reality for a second here.

The vast majority of the companies income is derived from - and the vast majority of their employees are engaged in - their day to day business of getting Joe Public to work and around the country.

Sure, they also (probably) generate income from inwards tourism, but this has to be a tiny fraction of their overall income. They (probably) also generate income from rent charged to shops and other users of their property. You know, like, Landsdowne Road uses their property. Oh, hang on a second, they're not getting revenue from this are they ?

If they took the box and resold it or let it out per match to other companies and generated revenue that would be a good use. I'm not saying 'there shall be no joy or levity in the company' but in the current climate it's hard to see how a struggling company can justify a perk like this. They did not get it for free - they got it by trading against a valuable asset (air space) thay they had. They could have traded it for something else more usefull to the company as a whole.

z

MOH

Davidth88 wrote: »

G

Used correctly this would be a powerful marketing tool , after all don't CIE do loads of work carting American tourists around , they need to entertain the travel companies and show Ireland off in the best light .

If we're relying on CIE to show Ireland off in the best light we're in a lot of trouble.

Davidth88

Guys,

You are pre-supposing that CIE would get 1Million in cash for the ' air space ', I imagine they would actually get a fraction of that.

The box could be a nice little earner for them , and should be if used correctly as both a marketing tool , and perhaps as an incentive to staff .

Now of course we are giving the CIE bosses credit for common sense not to be using it as a private ' perk ' , perhaps we could question if they have such sense.

As for trading it for something more useful from the IRFU , what ? A set of rugby kit , advertising perhaps ?

thebman

Davidth88 wrote: »

Guys,

You are pre-supposing that CIE would get 1Million in cash for the ' air space ', I imagine they would actually get a fraction of that.

The box could be a nice little earner for them , and should be if used correctly as both a marketing tool , and perhaps as an incentive to staff .

Now of course we are giving the CIE bosses credit for common sense not to be using it as a private ' perk ' , perhaps we could question if they have such sense.

As for trading it for something more useful from the IRFU , what ? A set of rugby kit , advertising perhaps ?

I don't think we need to question it, I think we already know the answer to the question.

Most likely will be used by management and even though lying empty most of the time, they won't go to the bother of renting it out to other companies.

BrianD

thebman wrote: »

I don't think we need to question it, I think we already know the answer to the question.

Most likely will be used by management and even though lying empty most of the time, they won't go to the bother of renting it out to other companies.

Even if CIE did nothing, others would come looking for it. They'll do a block deal with an events company. You can't get a ticket for the Ireland V England game so the notion of an empty box at an International is highly unlikely. Even for lesser matches they can still use it as a morale booster by rewarding staff with a couple of seats in the box.

shltter

lostexpectation wrote: »

cie is not in the sports industry.

They are not in the property industry either but they have done deals with property developers to allow them to develope land and provide infrastructre and revenue streams from the developement.

First off this cost CIE nothing

Second this would only be a scandal if it was used by CIE for the board or senior managers or was left sitting empty.

None of that has happened. All that has happened is that CIE has taken the option on a box which has the possibility of generating more revenue than the cash alternative ever could. Therefor it is a good deal as long as it is used properly.

Big deal about nothing if in 2 years time you have pictures of Lynch, Meagher and co sitting in a directors box smoking cigars then you will have a story.

shltter

zagmund wrote: »

Lads, lads, lads . . . CIE may be in the tourism business, but let's get back to reality for a second here.

The vast majority of the companies income is derived from - and the vast majority of their employees are engaged in - their day to day business of getting Joe Public to work and around the country.

Sure, they also (probably) generate income from inwards tourism, but this has to be a tiny fraction of their overall income. They (probably) also generate income from rent charged to shops and other users of their property. You know, like, Landsdowne Road uses their property. Oh, hang on a second, they're not getting revenue from this are they ?

If they took the box and resold it or let it out per match to other companies and generated revenue that would be a good use. I'm not saying 'there shall be no joy or levity in the company' but in the current climate it's hard to see how a struggling company can justify a perk like this. They did not get it for free - they got it by trading against a valuable asset (air space) thay they had. They could have traded it for something else more usefull to the company as a whole.

z

Its a tad early to criticise them for not getting revenue the stadium is not built yet

What should they have traded it for that is more useful than a potential income stream

Bluetonic

As a side it's a pity they didn't work with the Lansdowne Road Stadium Development Company and integrate Lansdowne Road station into the podium. People using the stadium would then have direct access to the stadium/stands and not have to use the narrow platforms in the existing station or the small entrances/exits along with having to cross the rail line in some cases.

Makes sense to me in my head anyhow, the current setup is crazy with footfall on Lansdowne Road leading to congestion before and after games.

lostexpectation

GerardKeating wrote: »

But they are in the tourism industry...

im guessing it does tourism packages, what other places does it have pernament lease on.

zagmund

For those who missed my point - apologies - I may have been a little too subtle.

Cash is more usefull than a box in the short term when the company is short of cash.

If they negotiated the box as a source of revenue (as described above, by re-selling use of the box) then that is *even* better, but there is nothing to indicate this has been done. If that is the case, then that is probably the optimal outcome.

z

shltter wrote: »

Its a tad early to criticise them for not getting revenue the stadium is not built yet

What should they have traded it for that is more useful than a potential income stream

shltter

zagmund wrote: »

For those who missed my point - apologies - I may have been a little too subtle.

Cash is more usefull than a box in the short term when the company is short of cash.

If they negotiated the box as a source of revenue (as described above, by re-selling use of the box) then that is *even* better, but there is nothing to indicate this has been done. If that is the case, then that is probably the optimal outcome.

z

It was in the first post

CIE defended its decision. “The corporate box can be used by staff and customers or, as in the case of a similar arrangement with Croke Park in relation to air rights over the Canal End, we can lease it back to the stadium to provide a further income stream to the company,” it said.

Victor

shltter wrote: »

QUOTE=lostexpectation;58771542]cie is not in the sports industry.

They are not in the property industry either [/QUOTE]Group property and group pensions are the core of CIÉ's work.

shltter wrote: »

First off this cost CIE nothing

Yes, it did. If CIÉ played hardball, the stadium company wouldn't have been able to build as big as it wanted.

Remember property is about "Location, location, location".

BendiBus

Victor wrote: »

If CIÉ played hardball, the stadium company wouldn't have been able to build as big as it wanted.

How hard do you think CIÉ could have played before they were told by Govt to back off and stop interfering with the development of a prestige project like Lansdowne Rd?

whosedaddy?

There are two issues mixed together.

- If they had sold the air rights - would they have gotten €1M in cash or not?
I recon that deal was much longer in the works, than the recent layoff announcements.

- Suppose they had gotten €1M (and depending when - given the stadium is far from finished) - would the extra money save any jobs?

Everybody seem to assume that by not signing that corporate box agreement less jobs would be lost.

Certainly a lot of companies could do with better HR PR of late..

BrianD

whosedaddy? wrote: »

There are two issues mixed together.

- If they had sold the air rights - would they have gotten €1M in cash or not?
I recon that deal was much longer in the works, than the recent layoff announcements.

- Suppose they had gotten €1M (and depending when - given the stadium is far from finished) - would the extra money save any jobs?

Everybody seem to assume that by not signing that corporate box agreement less jobs would be lost.

Certainly a lot of companies could do with better HR PR of late..

You must remember that Lansdowne Road are already in posession of the air rights. The old West Stand (the older of the two stands) was built over the railway and Lansdowne Road are a property owner either side of the railway and indeed have passage ways underneath it.

So the stadium already has the rights and I'm not sure if CIE were getting anything for it up to now. I doubt if there ever was going to get cash but what they got in return was a valuable long term asset in itself. Don't forget that CIE have got good deals on air rights in the past. €1m is really sod all to a company like CIE. It would be spent in a blink. Now they have an asset that can generate income and/or be used by the company for promotional purposes.

In reality they are getting something for nothing.

gnxx

I've worked in large private companies. I know that if I negotiated this deal I would be fired.

There is NO justification for this. Find the person(s) who put this deal together and fire them.

We all know the intended use for this. Somewhere for management to take their friends and family.

Maybe they could invite the directors of FAS and other state agencies to a "fun day" during the summer.

BrianD

gnxx wrote: »

I've worked in large private companies. I know that if I negotiated this deal I would be fired.

There is NO justification for this. Find the person(s) who put this deal together and fire them.

On the contrary, if you negotiated this deal you possible would have got a bonus and a promotion. As I mentioned, Lansdowne already hold the air rights above the DART line and have done so for decades. I understand that the west stand has been there since the 1950's so the IRFU has effectively has the air rights. I doubt that CIE would have any claim at this stage so the provision of a free box is a good out come.

We all know the intended use for this. Somewhere for management to take their friends and family.

Maybe they could invite the directors of FAS and other state agencies to a "fun day" during the summer.

That's speculation on your part. The more likely outcome is that CIE will lease this box. Don't forget that CIE are also in the tourism business as well (accepting the fact that most fans are unlikely to travel by bus). AFAIK all box holders get a sign outside their box so CIE also get a free advert in the stadium.

It would be a great idea if they handed the box over to FAS who can then entertain business leaders here with a view to further job creation.

Victor

BrianD wrote: »

On the contrary, if you negotiated this deal you possible would have got a bonus and a promotion. As I mentioned, Lansdowne already hold the air rights above the DART line and have done so for decades. I understand that the west stand has been there since the 1950's so the IRFU has effectively has the air rights. I doubt that CIE would have any claim at this stage so the provision of a free box is a good out come.

If they already had air rights, why are they giving CIÉ a box?

The air rights being used now are different and CIÉ agreement was needed to (a) get planning permission (b) build.

BrianD

Victor wrote: »

If they already had air rights, why are they giving CIÉ a box?

The air rights being used now are different and CIÉ agreement was needed to (a) get planning permission (b) build.

Neither you nor (I assume) nor I are privy to the exact terms of the deal nor the negotiations to date. No doubt a FOI request might present some info but it may well not if it is deemed to be commercially sensitive.

I think people are being distracted and just see some civil servant sorting themselves out with a nice box for the rugby. In these times I can understand the hysteria but it really is much a do about nothing.

Why? I am assuming Lansdowne already have the air rights either by being there long enough or perhaps through a deal negotiated many years ago. It seems that this is correct as news coverage refers to an "ongoing licence fee". Ultimately, there is no real change in the status quo. The existing stand occupying the existing air space is being changed for a new one. It might be a bit bigger or smaller but the fact that the IRFU are already above the line really weakens CIE's negotiating position. Plus it's not really a competitive market on that stretch of track. The stadium is ultimately a great asset to the amenity of the city and the project has government support.

As a "local party", CIE could (may have?) made an observation or objection to the planning process. The really couldn't object on the basis of air rights already given but there are other obvious issues that the stadium creates. One being that match day operations cause disruption to the local station and operational issues at the level crossing. Plus there is the disruption during construction but CIE would have to facilitate this. Perhaps the box was the sweetner for this disruption. CIE gain a longterm asset within the stadium. I have also read - asuming that nothing has changed - that the design will allow the level crossing to remain shut during matches and therby not causing disruption to rail users.

So I presume that the box was part of this negotiated package and it was. If you read the press release you will note that the box was one of three things that CIE got. "As the development of the stadium required the air rights over the line, an agreement was reached which provided for an ongoing licence fee payable to CIE, advertising space within the stadium, and a corporate box". All of this is an ongoing income stream for the company. In the long run this may yield more income then a one off payment. Though I am guessing that the 'advertising space' is probably in front of the box but they are getting an ongoing licence fee.

Don't forget that that the sale of these corporate boxes are one of the ways that the IRFU are financing the construction of the stadium. Giving one of these (there seems to be only 10 of the type that CIE got) away would have caused the IRFU some pain.

lostexpectation

to sum up: getting the box was totally unnecessary