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Morning Briefing for pub, restaurant and food wervice operators

Wed 14th Feb 2018 - Update: Premier League auction rights, new Chipotle chief executive, Square Pie mini-bonds
Cost of Premier League football rights dampened in latest auction: Sky and BT have agreed to pay £4.46 billion for rights to the majority of live Premiership matches. Five out of seven packages of matches have been awarded in the current auction, covering three seasons from 2019. The price means the Premier League’s income from domestic rights is set to fall for the first time since the competition began. Sky will remain the dominant Premier League broadcaster after it secured four of the five packages, including Monday, Friday and Saturday evenings, as well as Sunday matches. The company will pay £9.3m per match, a 16% discount on its current bill of more than £11m. BT has secured rights to Saturday lunchtime kick-offs at a cost of £9.2m each. It represents an increase on company’s current bill of £7.6m per match and means a slightly weaker schedule as BT Sport currently shows Saturday matches in the more popular 5.30pm slot. However, unless its buys one of the two unsold packages, BT’s overall Premier League cost will fall from £320m to £295m per season. It currently has rights to 42 matches per season but has so far secured only 32 in the new auction. The Premier League had hoped new bidders such as Amazon and Facebook would arrive to increase competition in the auction. There are suggestions that the two remaining packages had failed to hit their reserve prices. The Premier League’s total income from domestic rights increased 70% last time as competition between BT and Sky drove up prices. David Rey, Sky Business managing director added: “This is an excellent outcome for our customers. We continue to invest in the sport that matters most to pubs and clubs, and their customers. This new deal means Sky remains the home of the Premier League and provides our customers with even more opportunities to drive footfall into their venues.” Marc Allera, chief executive of BT’s Consumer division, said: “The Premier League is undoubtedly the most competitive and exciting domestic league in the world, so we’re delighted that our customers will be able to continue enjoying Saturday games on BT Sport.”

Chipotle hires Brian Niccol to replace Steve Ells: Chipotle Mexican Grill has appointed Brian Niccol as chief executive effective 5 March 2018. Niccol most recently served as chief executive of Yum! Brands’ Taco Bell Division, where he was responsible for the successful turnaround of the business. Chipotle chairman, current chief executive and founder Steve Ells, who will become executive chairman, said: “Brian is a proven world-class executive, who will bring fresh energy and leadership to drive excellence across every aspect of our business. His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant. The board is confident that Brian’s passion and skillset ideally position him to make the bold moves needed to improve operations and take the company to the next level, all while remaining true to our purpose and the values that are essential to our customers.” Niccol said: “I am very excited to be joining Chipotle at this pivotal time in its history. I have tremendous respect for the Chipotle brand and its powerful purpose. At Chipotle’s core is delicious food, which I will look to pair up with consistently great customer experiences. I will also focus on dialing up Chipotle’s cultural relevance through innovation in menu and digital communications. This will attract customers, return the brand to growth, deliver value for shareholders and create opportunities for employees.”

Square Pie collapse raises concerns over mini-bonds: The Times has reported that the collapse into administration of Square Pie raise concerns over mini-bonds. Square Pie is the first collapse of a business that issued a mini bond via Crowdcube, the crowdfunding site – 324 investors who backed it in 2015 likely to lose all of their £655,500 investment. The Times stated: “The ‘pie bond’ was promoted on Crowdcube as offering eight per cent annual interest. Investors were invited to ‘get a slice of the pie’ and told that the four-year bond would fund new restaurants and products to be sold in main supermarkets. Rob Croxen and Will Wright, from KPMG, were appointed as joint administrators of Square Pie Limited on 5 February and closed all five restaurants immediately, resulting in about 50 redundancies. Crowdcube told bondholders to contact KPMG about the failure. However, administrators told the investors that the bond had nothing to do with them at this stage because of the way it had been structured as a separate business. The bond is held by a company called Square Pie Bonds Plc, which is not insolvent. It remains under the control of Square Pie’s directors, Martin Dewey and his wife Lucy. Once Square Pie Bonds is wound up, a claim can be filed to KPMG which would effectively make bondholders creditors to Square Pie Limited, although this may be futile as it is understood that there is very little prospect of them seeing any return. Using Moody’s data, Crowdcube had told investors that there was a probability of Square Pie defaulting on its credit obligations other than the bond of only 0.7%.” 

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