Bruce Springsteen’s lyric to Atlantic City could easily be applied to the plight of Punch Taverns plc.
Owner of some 4,300 pubs across Britain, Punch has been the subject of much controversy in recent years regarding it’s treatment of it’s customers – the pub landlords – and the pubs you and I frequent.
To recap here’s the dull bit so if you only want the usual smut, drivel and lampooning of Bradford Council then fast forward…there’s loads of that later.
Punch is a “Pubco” – pub operating company – created in simplistic terms on piles of debt secured by piles of properties commonly known as pubs.
A model designed by the City whizz kids to make instant fortunes – for them – it has proven to be based on foundations of shifting sand.
Punch bought thousands of pubs at values that were, at best, based on the finger in the air approach. It borrowed billions based on the “good” security it offered lenders i.e. our local drinking holes.
People made fortunes…and the price of a pint was sent into orbit.
For a while things could “only get better” (T.Blair) so it bought more. After all, surely what goes up keeps on going up?
When things eventually went tits up (nothing to do with T.Blair) lenders realised they were not as secure as they thought and so interest rates to Punch, lying on the ropes, got hiked.
Now the Catch 22 – with everything tits up, people spend less, pubs take less and landlords have a bit of a problem paying higher rents to pay for Punch’s excesses. And that’s where we are right now.
As its debts have clearly proven too large to ever contemplate fully servicing, Punch tried – and failed – to deliver a restructuring plan this week to bond holders with a clear “take it or leave it” approach, similar to how it has treated it’s tenants.
However, Punch found strong arming its funders a touch harder than turfing out tenants and boarding up local pubs, withdrawing the proposal at the eleventh hour.
Having squeezed the pips out of hundreds of pubs up and down the country with ever escalating rents and the sinister beer tie, which compels tenants to buy products direct from Punch often way above market prices, Punch remains a financial basketcase.
Punch overpaid, over-borrowed and now is almost under water.
Pubs have been sold off and debt has been reduced but it is now crunch time as Punch plays a game of brinkmanship with the hedge funds and insurance companies that control it.
Anybody hoping for a collapse of Punch and it’s broken model may not get their wish in the short term. Worryingly, tenants who have paid deposits up-front may find these swallowed in any administration like a fizzy plonk; more fees for the City boys!
Where it leaves tenants remains to be seen even though Punch claims it “…highly unlikely that (tenants)…will lose their deposits.” Pull the other one?
As local MP and Save the Pub Parliamentary Group chairman, Greg Mulholland said “…the astonishing level of debt remains gained through the reckless over acquisition…that made a few City boys filthy rich.”
Drink to that one tonight if you will.
Crocodile Tears
As if things were not desperate enough for the people flooded from their homes they have had to contend with half the House of Commons coming to visit for a photo opportunity; surely nothing to so with an election in the offing?
House flooded, business washed away and what do you get? David Cameron, Ed Milliband and Hopeless Cleggy et al in brand new wellies followed slavishly by the media who appear to have relocated to Somerset en masse.
Even Communities Secretary, Eric Pickles, has left the comfort of Westminster and his free biscuits to drop in for a photo shoot ridiculously posing atop some sandbags; imagine the sandbags laying down old Eric would have saved.
Doing his very best to preserve the notion that we Yorkshire men are thick as posts each and every time he appears on screen, Pickles typifies why most ordinary folk despair of the idiots we have in power these days.
Politicians can only speak in PR sound-bites which means that when they do open their mouths and say something “off message” they demonstrate how stupid and out of touch they really are; Pickles has taken this to a new level.
And as fingers are pointed it’s hard not to feel that were this some remote disaster by now we would have had all night telethons and Peter Andre and Jordan urging us all to donate.
Small mercies then, perhaps even for those in Somerset.
The Pietersen Saga
The England & Wales Cricket Board (ECB) have done as we expected in their attempts to explain the sacking of England’s chief prima donna; they have ducked and fudged it with PR spun drivel that Cameron and pals would be proud of.
The reality is that KP was indulged by all so long as the team was winning and he was smashing it to all parts. Then we got stuffed out of sight with him playing like an idiot who appeared not to give a stuff.
With a technique and ego that he was seemingly unable to compromise in the later years of a turbulent career you could make a case for a player on the wane.
Mavericks are only indulged for as long as what they achieve represents enough to compensate for them generally being a pain in the arse. KP simply expired his sell-by date and, in keeping with ECB tradition, was dumped by doublespeak.
We too have had a few troubled souls over the years in the Villas dressing room so answers on a postcard anybody? Who was the ultimate arsehole you ever shared a dressing room with?
BBC Wins Gold in Sochi
Worried that attendances for his Sochi spectacular may have been impacted by the fact that most people just don’t like him (he knows where you live…Ed) Vladimir Putin, that little Russian charmer, must be hugely grateful for the influx of BBC staff.
Once again outnumbering the GB athletes, BBC staff have landed in their droves in Sochi with anybody not towing the line being threatened with an early expulsion back to Somerset to interview Fat Eric.
Quote of the Week 1
Sports columnist of the year, Mail on Sunday’s Patrick Collins, summed up David Cameron’s inane recent populist comments in support of KP as follows.
“It was a rather sad effort to win a cheap headline. Next time the PM recognises the existence of sport, he might do better to concern himself with the disgraceful provision for sport in state schools and the miserably inadequate funding for primary school PE.”
I’ve been saying that for years Patrick but then I guess you have too. Perhaps Cameron might be better endorsing the Olympic rowing team as he might need them just now.
Hang ‘Em & Flog ‘Em Section
Locally we are having problems with a few little oiks who insist on riding their motorbikes at speed and often without regard for anybody else; ignoring road tax and insurance seem minor offences when considering wheelies up main roads.
Riding without helmets also seems to provide the delinquents some “kicks” although brain damage cannot be a realistic threat.
Locals are rightly hacked off at the typically limp response from Plod who seem to want the miscreants delivered to the local station in a contrite and apologetic state of being before they even show an interest in rewarding them with a gold ASBO.
That a few ignorant and reckless idiots can prove too hard for Plod to get a grip of, despite pissing off good people, is galling.
Vote for me and I will ensure they are placed in stocks and made to watch as their bikes are crushed into small pieces…like their brains. There…that’s got the local Lib Dems bricking it now!
Some Piggy Bank
According to the local rag “…more than £9 million of reserves has been freed up by Bradford Council after an internal review found it was going spare.”
Did they find it under the bed or what? Once again I shudder in my sleep at the clowns running this city.
Our Green and Concreted Land
My only experience sat on a horse happened here; keen to try this experience I found myself mounting Red Rum’s grandad and with a slap of its arse by my young instructor, off he flew with me hanging on for dear life despite the stench.
Forget Black Beauty and pictures of a poised and confident rider straddling the land. I was clinging to some flea bitten beast, snot and gunge pouring from its nose, streaking across a bleak bit of Bradford wasteland. Needless to say I could not walk for days.
The riding school is on an area of land near Fagley Quarry where a planning application for 600 houses and a new “local centre” (a sop to planners and probably a bus shelter) have been submitted.
The riding school rents land from the owners; over 200 riders a week use the site, and around 50 of these are part of a Riding for the Disabled group. Based at the site for 35 years, it is also home to a pony club.
The application is a joint project between the owners and Bradford Council – which owns an area of the proposed development – in response to Bradford’s “chronic housing shortage”.
Princess Anne visited the school to officially open an all-weather arena in April 2012, when she described the club as “fabulous.” Quite right M’aam…somewhere positive for young people to engage and not on an Xbox!
Once again the dimwits in control seem deluded enough to believe that thousands wish to live here. Greed, greed, greed…shame on all if this ever sees the light of day.
And Finally…Quote of the Week 2
Lisa, the iron lady who teaches pensioners’ pilates at the gym, was demonstrating a reverse curl the other morning.
This involves lying flat on your back – where most of us are quite happy to stay listening to Neil Diamond – then slowly raising your legs up and over your head and trying not to fart on old Edna in front.
As she implored us all not to try to fling our legs up too quickly – fat chance for most of the octogenarians present – Lisa offered the following sage advice.
“You might be a bit stiff first thing in a morning but by tonight you’ll have no trouble getting your legs behind your head!”
Is it me?
Patch says
That flea bitten beast with snot and hinge pouring from the nose must have been the best ride of your life (and you have had a few) especially if you couldn’t walk for days