Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Councils & Clubs – Southampton, Darlington, Cheltenham Town and Bury

Posted by John Beech on April 3, 2009

Historically the link between councils and football clubs has been the ownership of stadiums. Today in the Premier League only Hull City and Newcastle United retain this link, yet another indicator of the post-commercialised game. But are new links emerging?

As the precarious future of Southampton is picked over, the Daily Echo reports that the local council won’t rule out purchasing St Mary’s, where talks were under way with Take That, Rod Stewart and The Eagles about gigs (1). It’s hard to imagine they would want to take over the massive debt (£24m) without a massive stream of gigs… oh, and a viable football club.

Such speculation will fall on angry ears in Darlington, where George Reynold’s plans failed to come to fruition mainly because of the local council’s intransigence in granting planning permission for non-football events (2). At least, that’s Reynold’s analysis. Certainly his successor George Houghton faced similar problems. In both cases non-football revenues were an essential part of the business plan.

Another club struggling financially at the moment is Cheltenham Town. This season they have been forced to let a string of palyers go as they try to balance their books. The resignation of Simon Keswick, said to be worth £996m, as a director in January (3) won’t have helped matters. March saw the entire squad up for sale (4). Now the club have approached the local council for a loan of £100,000 to keep them afloat (5). The rationale the club puts forward is that the council subsidises the local theatre, so why not football? I think the answer is clear – the theatre is not operating in a fully-commercialised industry where companies are expected to be self-supporting. Perhaps I’m splitting hairs, but what next? Kensington & Chelsea Royal Borough Council joining Roman Abramovic on the list of Chelsea’s ‘soft’ debtors?

Giving the request an interesting twist is the fact that the club’s Chairman, Paul Baker, is a Lib Dem councillor, and exactly half of the 40 councillors are of this persuasion. Normally the decision would be made by the Cabinet of the Council, and here six of the seven are Lib Dems. As a result the decision is now to be made by the Council’s Chief Executive (6). No pressure there then.

The request for financial help from the local council has an interesting precedent. In 2002, facing mortgage arrears of £1m on their stadium and already slipping inevitably into Administration, the club turned to their local council for help. The council tactfully declined to sub the club saying “We have to cater for many needs from what is not a limitless budget.” They of course also had local tax payers, and hence voters, to consider. Instead they came up with a sensible and pragmatic alternative – a sponsorship deal of £50,000(7) to promote the local Metro tram service .

Will Southampton and Cheltenham councils prove to be as sensible and pragmatic, or will they follow the Darlington council hard line?

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One Response to “Councils & Clubs – Southampton, Darlington, Cheltenham Town and Bury”

  1. [...] Posted by John Beech on April 29, 2009 On April 3 I commented on the financial woes of Cheltenham Town, and how their request for a loan of £100,000 from the local council had become bogged down in problems of conflict of interest (1). [...]

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