The day I became a pubco CEO

By Robert Sayles

- Last updated on GMT

Related tags Money Tenant The tenant

The day I became a pubco CEO
An official looking letter arrived through the post last week. It was an invitation to Number 10.

Arriving early, I was escorted into a large study. A distinguished gentleman sat at a large mahogany desk, studiously poring over some documents.  Looking up, he gave me a broad smile.  

“Ah, Mr. Sayles. Glad you could make it” he said.  “Have a seat. May I call you Bob?”

“By all means. What should I err…..”

“Call me Dave.”

“OK err….Dave. Do you mind me asking what this is all about?”

“Well you see Bob; we’ve got a bit of a problem on our hands. We’re in a bit of a pickle over the pub trade. I’ll be honest with you; I’m not sure what to do. We’re getting inundated with input from both sides. I need an unbiased opinion; that’s why I’ve invited you here today.”

“Well Dave, impartiality is my middle name. What do you want to know?”

“Talk me through it Bob.”

“Well I invariably try and represent the tenant’s point of view, but in the interests of impartiality I’ll put my pubco hat on. Let’s indulge ourselves for a few minutes, shall we? Imagine I’m a pubco CEO.”


“Now then, I have aspirations to be the biggest and the best; so over time, I start to grow my estate, acquiring more and more pubs.

They’re good income generators so they don’t come cheap. Of course the BBPA’s Beer Barometer makes it abundantly clear I’m buying into a falling market, but what the hell? Banks are falling over themselves to throw money at me, so why not?

The problem is prices start to rise; to the point that I find myself paying way over the odds.

It soon becomes clear that to finance the cost of all this borrowing I need to generate more revenue. From where I’m sitting, wet and dry rent alone just won’t cut it.

To be honest, I’m in a bit of a quandary. Then, in a moment of inspiration, it dawns on me. The drinks industry is completely unregulated. I don’t have to abide by any rules. In fact, I can write them!

So, how do I go about raising extra cash? Looking around, it soon becomes clear the possibilities are endless.

Take beer monitoring equipment for example.

Now I’m well aware that its accuracy is, let’s be diplomatic about this, questionable. And of course, it’s not in my interests to be overly focused on reliability.” 

“Why’s that?”

“Dave, get with it! Raising capital is my top priority.

Do you know how much money this equipment can generate? Tenants are obliged to compensate us for supposed lost revenue. On top of that, I hit them with a tampering fee and while they’re still reeling from the shock, I slip in a 350 quid administrative fee to boot! It’s just so easy to make money, isn’t it?

And why stop there I tell myself?

Tenants late with their order? Hit them with a £46 administrative fee. Not enough to cause a major outcry but just enough to give us some much needed additional revenue. Trust me Dave, when you’ve got in excess of 5,000 pubs in your estate, those £46 fines soon add up!

It’s just so easy to make money, isn’t it?

Now I’m on a roll. Many of the pubs I’ve acquired are desperately in need of investment. Once again I turn to my partner.”

“Presumably with a view to offering additional support?”

“Oh Dave, you’ve got so much to learn, you really have.

Let me give you an example. One of our tenants is on a 25 year lease and wants to erect an awning outside his pub. The cost to us is around 3.k. If the tenant buys it through our supply company it’ll cost him around 7k. The problem is he doesn’t have the cash, so what do we do?”

“Make a magnanimous gesture; embrace the ideals of Big Society?”

“You mean allow him to take advantage of our purchasing power and then throw in some favourable credit terms?”


“Yeah right! What I actually do is hike the asking price of the awning to 18k and rentalise it at 4.5k per annum over the length of the agreement.  He’s got 22 years left on his lease so that awning alone will net us well in excess of 100k!

But do you know what the best bit is?”


“Once trade starts to pick up, we raise the rent as well! Not bad for an awning eh? Imagine what a full scale refurb would net us? It’s just so easy to make money, isn’t it?”


“So then I start to think about what else we can do.

Training seems like a good little earner. My company stipulates all prospective tenants must sign up to our training course. We of course dictate the content. After all, training companies are so desperate to get our business they’d teach Buddhist chants and mantras if we asked them to.  

Will you find in depth chapters on FMT, below market rents and the role of bailiffs on our courses? Oh no! We play safe; stick to chalkboards and SWOT analysis. A nice little earner and not too many questions asked. Perfect!

It’s just so easy to make money, isn’t it?

Then one day I notice agreements stipulate tenants are obliged to buy their beer from us. Why stop there I say? A quick amendment to the agreement and suddenly all new partners are obliged to purchase spirits and soft drinks from us as well. It’s just so easy to make money, isn’t it?

While we’re on the subject of drinks, why not raise our prices as often as we can? After all, we can negotiate big discounts with brewers and pass on our hefty mark up to the tenant? It’s just so easy to make money, isn’t it?

Then there’s the dilemma of below market rents. They’re not really what I’m looking for. No problem, I can fix that. Inflate FMT levels and hey presto, below market rent suddenly becomes the market rent. It’s just so easy to make money, isn’t it?

And what about an outgoing tenant who doesn’t have enough money to pay for dilapidations? Needless to say, we inflate costs before invoicing the tenant. Of course he can’t pay, so what do we do?

I’ll tell you what we do. We trouser the deposit and f and f. If that doesn’t cover it, we go for a compulsory sale of any residential property they own. It’s just so easy to make money, isn’t it?

But do you know what the best bit is? We don’t actually carry out any repairs. We wait and see if the incoming tenants bother to pay for a survey. If they don’t, the liabilities become their responsibility. It’s just so easy to make money, isn’t it?

Then one day I notice some of the clauses in our agreements aren’t really compatible with the company ethos. Guest ale provision? I don’t think so somehow.

Phase it out I say, so we do. It’s just so easy to make money, isn’t it?

“Then there’s insurance and AWPs. Now of course we could……”

“Err…Bob; I think we’ve got the picture. Just one question.”


“With all these income streams coming in, how come you’re skint?”

“Dave, you still don’t get it, do you? I’m not! I’ve just placed an order for the new Bugatti Veyron!

After all, it’s just so easy to make money, isn’t it?”

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