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

Archive for September, 2009

Scary plans at Chester City

Posted by John Beech on September 30, 2009

Alerted by a posting on the Supporters Direct blog titled Strange goings on at Chester City, I’ve been looking at an Excel spreadsheet (1), downloadable from the club’s website, of the club’s forecast for its Profit & Loss Account for 2009/10.

Highly commendable that the club should make this available, but it certainly isn’t going to reassure anyone.

Key number is ‘the bottom line’ of course – the projected profit or loss.  Homing in on this, you find, unless it has been corrected since, a projected Profit of an amazing £660k!  But wait – that can’t be right, not with a projected Income of only £649k, can it?  (That, by the way, includes a parachute payment of £215.5k, or almost exactly a third of the projected Income.) And a projected Expenditure of just over £1.3m?!?!

No, of course it isn’t right.  The spreadsheet has been set up to calculate profit (or loss) by subtracting Income from Expenditure, rather than the rather more conventional accounting standard of subtracting Expenditure from Income.  Oops!  The projected Profit of £660k, it transpires, should in fact be a projected Loss of £660k – quite an error by any standards.

With that kind of howler, it’s difficult to have much credence in any of the figures.

Even if we take the figures themselves seriously, it hardly paints a healthy plan.  Planned expenditure on ‘Playing Squad / Loans In’ is a staggering 92% of Income!!!

And all this from the man the Chester Evening Leader was hailing as the club’s ‘saviour’ back in June (the URL to the source now produces 404 page not found for some strange reason).

In case you haven’t seen, the club today sacked their manager Mick Wadsworth (2), who complains that the club is ‘full of negativity‘.  Once corrected, their projected Profit & Loss Account certainly is.

Posted in Costs, Debts, Uncategorized, Wages | Tagged: , , | 1 Comment »

The furious Winter’s rages

Posted by John Beech on September 29, 2009

Still catching up on my reading, I came across an extraordinary piece – Gerry Sutcliffe: a footballing nobody delivering cheap shots at the FA by Henry Winter (1).  Long on bile, venom and rancour, the article was rather shorter on facts.

He refers for example, to Sports Ministers who “come and go so quickly it is hard to remember their names and faces. Sports Ministers seem like the No 11 buses I used to take as a schoolboy along Whitehall. Don’t worry if you miss one; there’ll be another along in a minute.”  It may seem like that to some including Henry, but it surely ignores Richard Caborn’s spell as Sports Minister from 2001 to 2007, a period in post which most football mangers would envy. The fact that “the football correspondents of all the national newspapers” were gathered together at Wembley when, according to Henry, “an unfamiliar man walked in, sat down and attempted to speak with equal authority about football and the 2018 bid. Nice suit. Smooth patter. But who was he?  Blank looks spread around the room. Under the table, busy fingers sent text messages around to establish the identity of this individual who clearly felt he was a centre-piece of England’s bid. The mystery man was Sutcliffe.”

If Henry’s ignorance really was shared by his fellow football correspondents, it must surely tell us more about them and their competence to do their jobs than it does about Gerry Sutcliffe, who has been at the Department of Culture, Media and Sport for over two years

One phrase he used really had me chuckling.  He referred to football as “a wonderful sport which brings so much revenue to the Exchequer“.  I just wonder which clubs exactly he had in mind.  Those that are ultimately owned by companies registered in the British Virgin Islands for tax avoidance purposes?  Those that make regular losses?  Those which have never fallen behind in payments to HMRC?  The one that, to  come out of Administration, tried (unsuccessfully as it happens) to settle its debts to HMRC at the rate of one penny in the pound?  Those reported to be planning to pay their players through interest free loans so that the players can avoid paying tax?

Henry’s a first-class football journalist normally when reporting the game on the pitch.  A pity he doesn’t stick to that.  Why did he come up with such an odd column?  Perhaps it’s a case of, to quote his own words, “surprise, surprise, it’s party-political-conference time. How cynical.

Posted in Governance, HMRC, Journalism, Media | Tagged: , , , | Leave a Comment »

Apparently there’s only one Gary Neville…

Posted by John Beech on September 28, 2009

… and he deserves every penny he receives as wages.  Well, so a flurry of recent press reports would suggest (see for example in the Daily Mail [1] or The Sun, in what I think is the original source of this story with legs [2]).

To be fair to Neville, I can’t actually find the word ‘deserve’ within quotation marks in any of the various versions of the interview that I have seen.

What he does present is an argument which explains the high wages rather than justifies them.  It is, and I am putting words in his mouth, the not unfamiliar argument that, in a free market, prices are determined by the market – an argument that the ‘going rate’ is determined by supply and demand coming into balance.

I can’ really argue with that – the market is to a very large extent a free one, having become that progressively with the abolition of the maximum wage in 1961, the George Eastham case of 1963 and more recently the Bosman ruling of 1995.  It’s not absolutely free, as Sol Campbell is finding – it would seem he can’t seek new employment until the transfer window reopens in January – but it is free enough to make the market pricing case with a reasonable degree of conviction.

He does get a bit carried away though when he says “There’s a product there that people love. Fans are crucial but without the player you have nothing.”  Take away the player and you have another player waiting to fill his boots.  Take away the fans and their wallets?  Well, we would be turning the clock back to pre-1885, and the best Neville could hope for would be a phoney job employed by the club’s Chairman.

The issue of whether Premier League players deserve the wages they are on is a fine one for the pub, but the real issue is whether the free market that sets them is sustainable.  In the case of the Premier League it is built on Debt Mountain (height – £3bn).

My totally unsolicited, and no doubt unwanted, advice to Gary Neville and his fellow players in the PL would be to invest their ample wages rather than spend them – it isn’t likely to last, whether they deserve it or not.

Posted in Premier League, Wages | Tagged: , | Leave a Comment »

Margate’s struggles with HMRC

Posted by John Beech on September 28, 2009

Margate were back in the High Court this week.  On the 1st of July they had faced a winding up order from HMRC having only paid off half of a £55,000 debt (1).  This time around they were granted a further 56 days (2), having paid off £15,000.

This £15,000 had not emerged through improved cashflow, reduced costs or enhanced revenues however.  £12,500 of it had been raised by the sale of shares (3).

The further stay of execution was achieved through an undertaking to pay the balance, which I make to be £12,5000, in three monthly instalments of, I presume, just over £4,000 each.  Quite how this will be squeezed out of the club’s budget is far from clear, but the club have “satisfied the Court that funding is in place to repay the balance of the debt“.

Much of Margate’s woes derive from the club’s problematic attempts to redevelop Hartsdown Park.  Having been forced into exile in 2002, the club was relegated from the Conference as a result of ground issues in 2004.  The same year Keith Piper, by then the Chairman, announced that financial backing for a £6.75m redevelopment, with a 6,000 seater stadium and hotel complex (4).

By January 2005 the projected costs had risen to £9.5m and Thanet Council had still not granted planning permission, unconvinced by the proposed business plan (5).  By the end of April 2005 the club had called in the Administrators to protect itself from its creditors (6), but by October they had moved into a CVA (7).

By June 2007 they were in trouble with HMRC again (8).  HMRC have subsequently sought winding-up orders against the club in September 2008 and (the current attempt) in June 2009. It should also be noted that the club had faced winding-up orders from HMRC’s predecessors in January 1999 and April 2001.

Fans are now digging deep into their pockets to save the club (9), or, rather, to save the board.  They may want to think twice about bolstering a regime that is apparently more concerned with spending money it doesn’t have on building an inappropriately-sized stadium (Margate’s average gate was 453 last season – does the board really want the club to become the non-league answer to Darlington?) than on paying the taxman his long over-dues.

Posted in Debts, HMRC, Insolvency | Tagged: , , | 11 Comments »

Football as business – fantasy or awkward fact

Posted by John Beech on September 26, 2009

The self-schadenfreude of following pointless Pompey on my laptop wasn’t really working for me this lunchtime, so I was diverted by an interesting piece in the FT by Simon Kuper (1) entitled “Football abandons the fantasy that it is a business” (although it crosses my mind that the sub-editors had had a hand in this headline).

Simon concludes:
Only two financing models now remain. The first works for about six clubs, chiefly Manchester United and Barcelona: Have such a big global brand that you can generate money to pay great players. The second and rising model is the sugar daddy. Find an Arab sheikh to buy your club as a toy.

All this means the end of football as a pretend business. The executives in Zurich are finally realising that they do not run Shell or even Lehman. At best, their clubs will one day be like local museums: community institutions whose sole financial ambition is solvency.

There is little I would quarrel with in that, except perhaps the last sentence, but some of the arguments he puts in reaching that conclusion I don’t really subscribe to.  He makes much of the sustainability of clubs over the long term, suggesting that we have only lost Aldershot since 1992, and even they reappeared.  At the same time he acknowledges the number of insolvencies in that period.

So, clubs are sustainable, even if the companies which run them are nothing like as sustainable.

That does not make football not business.  Are clubs a bit like the dry rot specialists who constantly reinvent themselves to avoid their liabilities on the thirty year guarantees they have happily given out perhaps?  In other words, they operate continuously from the same premises under slightly different guises, hoping that no-one spots the difference.  Probably not, but they have done a good job in copying that business model!

What needs to be recognised is that football is business but a most unusual business, where profit maximising is almost invariably not the norm in terms of outcome, and is rarely so even in terms of intent.

To run a club which is financially healthy is not rocket science.  I suggest in the Finance chapter of a new book ‘Managing Football‘ edited by Simon Chadwick and Sean Hamil (and, no, I’m not on any commission or royalties!) that a club needs to follow the following guidelines:

  • Maintain a steady position in the centre of the table of a league that is appropriate for their potential fan base, avoiding relegation, and, to some extent, promotion.
  • Develop a committed local fan base.
  • Develop a long-term relationship with a sponsor that is itself financially stable.
  • Avoid the longer-term uncertainty of benefactor dependency.
  • Own its own stadium, one that has been built since the Taylor report and that has appropriate facilities for matchday hospitality and nonmatchday activities that generate revenue streams.
  • Have performance-related contracts with its players.
  • Maintain a squad that reflects its current league position in terms of performance and wages.
  • Employ a manager who is successful on the pitch and appreciative of financial constraints.

If, however, as Simon Kuper suggests, the majority of clubs will be run on the ‘sugar daddy model’, and my own research suggest that for a surprising number this is already the new reality, then there are simply not enough sugar daddys to go round.

Of course football will survive, but not as we know it Jim.  Will all the clubs?  No doubt the Harlemisation (as in ‘Globetrotters’) of Simon Kuper’s Big About 6 will ensure their survival.  And all the others?  As there was a shake-out of clubs in the decades immediately following professionalisation, I suspect that we are about to see a shake-out in the early decades of the post-commercialisation era.  That is, unless clubs get to grips with sustainable business models rather than ‘abandon the fantasy that football is a business’.

(And as for Pompey, well, best not thought about!)

Posted in Benefactors, Governance | Tagged: , | 2 Comments »

Is football really not ‘dying on its feet?’

Posted by John Beech on September 25, 2009

Sports Minister Gerry Sutcliffe, in a slight toning down of his attack on the way English football and football clubs are run, has said “Football is a success, nobody is saying it’s dying on its feet” (1).

It would be nice to be able to come out in whole-hearted agreement with this prognosis of the English game, but I find it hard to do so, at least with respect to the management aspects of clubs.

Perhaps I have become jaded – in a recent posting on a chat forum, someone commented with reference to this blog ‘The Dr’s a cheery soul isn’t he‘ (2).  The next poster suggested however ‘He was probably the life and soul of the party when he started studying insolvent football clubs, and has been ground down over the years‘ (3).  A not entirely inaccurate surmise!

But, joking aside, my prognosis of the English patient is that he is suffering from a chronic (i.e. long-term) illness, the symptoms of which are giving me, at least, increasing cause for concern.  These include, with differing degrees at the various levels of the professional game, and, of course, at individual clubs:

  • an ever-rising debt mountain;
  • increasing dependency on benefactors, who themselves are under increasing pressure due to the credit crunch;
  • working on the false assumption that ‘soft debt’ will never become hard debt;
  • a cavalier attitude to the payment of PAYE and National Insurance to HMRC;
  • using HMRC, in effect, as a benign bank, when the signs are clear that it is no longer prepared to be benign;
  • the increasing incidence of seeing the club’s fixed assets such as the ground and the training ground pass out of the club’s hands;
  • allowing costs (mainly the wages bill) to escalate at a faster rate than the rise in revenues;
  • allowing other (external) stakeholders to have an undue influence on the game;
  • failing to recognise fans as stakeholders;
  • an obsession with the short-term;
  • a reluctance to introduce ‘negative performance’ payments, so that the wage bill automatically drops should relegation occur;
  • an assumption that part-time management at the very top of the club’s organisational structure is sufficient;
  • an inability to act collectively within the league structure to resist the expansion of financial disparity between top and bottom of the pyramid.

Add to this an at worst bellicose, and at best indifferent, attitude to the sensible recommendations of the Burns Report, and a real attitude problem to the more sensible recommendations of both the UK government and UEFA, and you start to get the picture of a patient who is ignoring his symptoms.

Frankly, I think there are too many individual clubs that are dying on their feet, or, more specifically, it is the companies that own the clubs which are dying on their feet.  The very real danger is that the collapse of the company will drag the club out of existence.  How long before we have another Accrington Stanley (heaven forbid, even at Accrington Stanley), Aldershot or Maidstone United?

Unless there is a sea-change in the way clubs are managed, the number of dead companies will only increase.  If nothing is done, it is just possible that we will see the sector die.  The patient’s last words will probably be ‘Platini’s to blame‘, still accepting no responsibility themselves for their predicament.

On the other hand, they may decide to clean their Augean stables and, with alacrity, put their houses in order.

Which would you put money on?

Posted in Costs, Debts, Governance, HMRC, Insolvency, Organisational culture, Wages | Tagged: , , , , , | 2 Comments »

Hyde United wound up by HMRC petition

Posted by John Beech on September 24, 2009

Recently I have blogged on Hyde United (1) and complained about the lack of news on what was happening with the winding-up order sought by HMRC.  The most recent news I had was that in May the club had been given a further two month’s grace (2).

This morning the club was wound up in the High Court (3), but an appeal against the decision is being considered.  As I write, there is no response from their website (4).

Once I have managed to garner some more detail, I will blog some commentary.

Posted in Debts, HMRC, Insolvency | Tagged: , , | 4 Comments »

HMRC v. Rochdale

Posted by John Beech on September 24, 2009

Rochdale is the latest club to be served with a winding-up order by HMRC (1).  Of all the reassuring words from the club, perhaps ‘it is business as usual at Spotland Stadium‘ that are the most worrying, given that cashflow problems are blamed as the cause of this action.

Back in April 2007 they faced a similar winding-up order, which they fought off (2).  On that occasion late payment of grant monies was said to be the cause of a major cashflow problem.

The club has certainly taken steps to try and address its financial problems.  Last January there was talk of a merger with the Rochdal Hornets of rugby league fame (3).  This came to nothing, and the Hornets went into Administration with a debt of £55,000 to HMRC (4).  In March, MMC Estates finished a four-year spell as club sponsors adding to the financial pressures (5), but in May, having failed in the League 2 play-offs, the club released seven players and placed another three on the transfer list (6).  Over the summer there was even talk of a groundshare with Oldham (7).

No doubt the club is feeling the pinch of the ubiquitous credit crunch, but, like Accrington Stanley (see postings passim), with nearby neighbours in higher leagues, they face a real problem in building revenues.  Cutting costs is unfortunately only half the solution and arguably the less challenging of the two halves.

Posted in Costs, Debts, HMRC, Insolvency, Revenues, Stadium | Tagged: , , , , , | Leave a Comment »

Sad news for Spurs fans?

Posted by John Beech on September 22, 2009

The end of an era really.  I refer of course to the sad news that Chas and Dave are splitting up, following the death of Dave’s wife – a big enough story in its own right to make The Daily Telegraph (1) for example.

The link between entertainers and specific clubs goes back from Robbie Williams (Port Vale) and Elton John (Watford) through Eric Morecambe (Luton) to Tommy Trinder (Fulham), and doubtless a long way further, beyond my ken.

What made the link between Tottenham and Chas & Dave was that they were something more than ‘celebrity fan’ or ‘shareholder’.  Their recordings of Glory Glory Tottenham Hotspur and Tottenham Tottenham gave them a link with the terraces that other celebrities do not have, and provided some great marketing for the club (my excuse for blogging on this topic).

Celebrities from the entertainment industry generally seem reluctant to provide their talent to support their club, or the game in general.  I remember going to what had been billed by Coventry City as the very last event at Highfield Road; Elton John topped the bill (well, there was only in fact Lulu as a supporting act, so ‘topped’ is probably not the right word).  What an inspired choice I thought – Elton John would surely appreciate the historic moment.  In fact, it turned out be just another gig on his long tour.  He did not allude to the moment in history, the only reference to the venue being a comment that he had been there before to see his cousin turn out for the Sky Blues.  Somewhat disappointing as I hadn’t gone because of the performers.

Forgive me – I’m beginning to Rabbit Rabbit Rabbit.

Posted in Uncategorized | 2 Comments »

Three cheers for Manchester United!

Posted by John Beech on September 22, 2009

No, seriously!

With just the slightest touch of curmudgeon to begin though.  I’ve blogged before on how football’s culture of secrecy results in good news stories being hidden away, and this is another fine example.

Not well covered in the media, with the honourable exceptions of a report by Brian Viner in The Independent (1) and reports on Goals.com, was the Homeless World Cup, which has its own website.  Modelled on street football rather than the conventional form of the game, this year it was held in Italy, with match venues including the San Siro in Milan.

England’s team was organised by The Big Issue in the North, and Manchester United, as in many previous years, provided training facilities and support through their Football in the Community programme (2).  Not that they shout about – you have to descend several levels on their website (knowing where to go) before you find a rather short webpage (3, for some basic information).

Why the coyness, Man U?  You should be shouting about it!

Posted in Community, Premier League | Tagged: , | Leave a Comment »

Three cheers for the Premier League!

Posted by John Beech on September 21, 2009

Mind you, that is three out of a possible six, for two recent developments…

Certainly two cheers are deserved for the PL’s decision to make a one-off payment to the Conference of £1 million, this being in the context of the Conference’s loss of their Setanta contract for broadcasting rights (1). As the PL’s Richard Scudamore  put it “The Conference is an integral part of the football pyramid. It was absolutely the right thing to do.”  Spot on!  So why my reluctance to give this noble attempt to reduce this financial disparity up and down the pyramid a full-blown three cheers?  Well, it represents £50,000 from each of the twenty Premier League clubs – less than one weeks wages for a star striker.  I don’t feel then that I am being curmudgeonly in holding back that third cheer – a curmudgeonly approach would be to point out they are collectively in debt to the sum of over £3 million, and shouldn’t sensibly be giving any money away.  Perhaps two and a half cheers might be fairer.

Debt, of course, brings me to the even bigger news that the PL is finally taking action to stop their members living on Debt Mountain (2).  Last Monday Scudamore announced new financial measures to restrain the wilder excesses of member clubs, the day before UEFA announced action.  These PL measures are rather light on detail regarding sanctions, and fail to re-establish HMRC as preferred creditors.  Still the PL ‘vows to fight’ UEFA’s curbs on spending powers (3).

I’m afraid I can only raise half a cheer for half-hearted measures introduced unwillingly.  In any case, they lock in the inequalities that have grown rapidly since the PL’s formation.

Posted in Broadcasting rights, Debts, Football Conference, Premier League, Sanctions | Tagged: , , , , , | Leave a Comment »

Halesowen Town horrors continue

Posted by John Beech on September 16, 2009

Regular blog readers will be aware of the extraordinary happenings at Halesowen Town (see postings passim) for over a year.

Events have speeded up in the last week, no doubt as the rescheduled AGM was due to take place yesterday, Tuesday 15th September.  As things turned out, that meeting has not been held.  That is because the current board, led by Morrell Maison, placed the club into Administration this Monday, 14th September.

As I have previously blogged (1), what is published on the club website can mysteriously disappear, so I republish in full the text of the statement announcing this action, as at the time of this posting (2):

ANNOUNCEMENT

IT IS WITH GREAT REGRET WE HEREBY ANNOUNCE THAT ON MONDAY 14TH SEPTEMBER AT 15:47 HALESOWEN TOWN FOOTBALL CLUB WENT INTO ADMINISTRATION

We were forced to take emergency action following a series of coordinated attacks concluding with a threat to wind up the club by a particularly vexatious former employee of the company, who instructed solicitors of an equally malevolent shareholder.

THE DEADLINE TO COMMENCE WINDING UP HALESOWEN TOWN FOOTBALL CLUB WAS MONDAY 14TH SEPTEMBER.

HAD WE NOT TAKEN EMERGENCY ACTION IT WOULD HAVE MEANT THE END OF HALESOWEN TOWN FOOTBALL CLUB.

A new group has bought the club out of administration thereby preserving football at the Grove for the foreseeable future. We wish them, the players and the fans all the best for the future.

The Annual General Meeting Scheduled for Tuesday 15th will no longer be taking place.`

If Maison handed over control to an Administrator, who then sold the club to a new group, quite why his regime (the ‘we’ who wish the new owners well) is till in control of the website is far from clear.

It’s hard to imagine that as recently as just over a fortnight ago Morrell Maison was reported as saying “I’m confident we can come through this difficult phase in the club’s history and come out of it very positively.  My personal opinion is that we don’t need to put the club into administration” (3).

The club’s Administration announcement is not dated or timed, but it was being reported on the internet as early as 20:29 on Monday, less than five hours after the club went into Administration.  The club had in that time period also come out of Administration, and into the hands of new owners.

This is an amazingly short period of time given that an Administrator’s basic duty, according to the UK government’s Insolvency website, is “to manage the affairs of the company in accordance with the order by which he was appointed and with the proposals approved by the creditors [my emphasis]. An administrator is an officer of the court and is therefore subject to its overall control” (4).  As HMRC are a major creditor, can this all have been done and dusted satisfactorily by an officer of the court in under five hours?

It’s interesting to note a part of the Mission Statement of the appointed Administrators, Marshman Price (5): “Our mission is to … provide outstanding services and value for money to clients, creditors and other stakeholders“.

Who exactly is the ‘vexatious’ and ‘malevolent’ former employee?  My understanding that it is a former groundsman.  How it can be termed vexatious and malevolent to want your wages paid defeats me.

Who are the new group that has bought the club so amazingly swiftly?  Most likely candidate is Halesowen Town Football Club 1873 Limited, incorporated not in 1873 as the name might suggest, but on 8th September 2009 (6), so not exactly a company with a long-standing track record that might convince the Administrators to sell to with such amazing speed.

A director of this new company is Graham Ingram.  What exactly is his connection with Godfrey Ingram, who Maison said in court in early August was a potential investor (7), notwithstanding the fact that the latter Ingram is a member of Luton Town’s Advisory Board (8)?

I for one eagerly await a response to events from the FA.

They are not the only body to have an interest in events at the club.  Yesterday it was reported that the West Midlands Police Economic Crime Unit are investigating allegations of fraud at the club (9).

Posted in Debts, Governance, Insolvency, Ownership | Tagged: , , , | 4 Comments »

UPDATES to ‘Insolvency round-up’

Posted by John Beech on September 12, 2009

I’ve added a couple of short updates as ‘comments’ on the ‘Insolvency round-up’ posting, specifically on Lewes, Portsmouth, and Southend.

For some of the clubs I selected there is more substantive news:

  • Accrington Stanley
    The first two days of the ‘Save our Stanley’ campaign (although ‘Save Stanley’s Board’ might be nearer the mark) raised £10,000 towards the the debt of £308,000 to HMRC (1), and a fund-raising match against neighbours Burnley has raised over £40,000 (2).  The entire staff have given up a day’s wages, saving the club £4,000 (3).  There is a clear theme of desperation in this, which makes it all the more surprising that the club has turned away two expressions of interest in buying the club, one from Accrington Stanley Supporters Fund (4).  I would have thought the latter would be better advised to hold back and see the club go into Administration and an end to the current regime – they should have the resolve of the Supporters Trusts at Halesowen Town and Merthyr Tydfil.  If the best strategy the current board can offer is to go cap in hand to Blackburn (5) and Liverpool (6), then it’s surely time for them to hand over the reins .
    The future of the club effectively lies in the hands of Ilyas Khan, long-time would-be owner (7)
  • Bournemouth
    Eddie Mitchell has said he will not follow Accrington Stanley in getting out the buckets for collections (8).  In the same interview, he admits that he has been juggling the finances of the club since he took over 11 months ago.  Four possibilities:  due diligence wasn’t very thorough; he was very naive; he didn’t have enough to invest; or he’s a glutton for punishment – or, of course, a combination of the three.  A clue is perhaps provided by this thought of his, from the same interview: “We did a cash-flow this week and, without the current liability and outstanding debts, we would have broken even this month, which is a really good sign.” Paying the football creditors is still a problem, with the resultant transfer embargo still in place.
  • Harlow Town
    Things look increasingly dire.  The electricity supply has been cut off, and to play floodlit matches a generator has been hired.  This broke down three times in the first 25 minutes of the game against Concord Rovers.  Not surprisingly the referee declared the match abandoned, and Harlow Town face a serious fine from the Isthmian League, the last thing the club needs at the moment (9).  The prospect of a large fine may seriously jeopardise the club’s attempts to negotiate a CVA.
  • Weymouth
    Another low point has been faced, and overcome.  The appeal to raise £50,000 to avoid going into Administration was extended last Wednesday by a week (10), and then yesterday (Friday) came the welcome news that the target had been met (11).  The club still has a long way to go though.

I’ve still not managed to find out what is happening with Hyde United, given an eight-week reprieve in the court battle with HMRC on May 20th over debts of £200,000, and I’m guessing that none of their fans read this blog!

Posted in Debts, HMRC, Insolvency | Tagged: , , | 3 Comments »

Revolving doors at Dorchester

Posted by John Beech on September 12, 2009

Followers of this blog will recall that Eddie Mitchell’s sudden move to the board of Bournemouth has resulted in some unusual arrangements at Dorchester Town, where he was previously Chairman (1 and 2).

First Eddie handed over his majority shareholding to sons Tom and Josh on the Dorchester board (3), an arrangement that never seemed likely to pass FA scrutiny.  Dave Roberts was then installed as Chairman (4).  This was potentially problematic as Roberts was a director of Eddie Mitchell’s company Seven Developments.

On August 5th, the contentious Mitchell shareholding was sold to Tony Newman (5) and the Mitchell sons left the board.

Just as thing seemed to be looking a little more stable in the board room, last Wednesday Dave Martin resigned from the board (6), as did Annie Greenslade, the club’s Vice Chairman (7), both club stalwarts. Yesterday (Friday) Shaun Hearn was reported to be acquiring the majority shareholding (8).  Martin was known to be pro-Hearn  and anti-Greenslade (9) and is an ex-director of the club.

Not a happy board room it would seem, nor one where a clear unity of purpose to move the club forward has been apparent, which is rather worrying at a club which last year made a loss of £276,711, which last June owed Seven Developments £203,130 (10), and which has an average gate of very close to 500 for the last two seasons.

The newly formed Supporters Trust welcomed Newman’s acquisition of the club last month (11).  In the last few days, with Hearn’s takeover imminent, they felt it was not in the best interests of the club to pursue a Trust takeover, and declared themselves pro-Hearn (12). If the Hearn takeover falls through, the Trust will “step in to safeguard the future of the club“.

Whatever the short-term outcomes regarding ownership are, whether it is Hearn or the Trust, let us hope some stability returns for the longer term.

Posted in Benefactors, Ownership, Trusts | Tagged: , , | 1 Comment »

A ‘win-win’ at Livi? Well, perhaps

Posted by John Beech on September 11, 2009

As my e-forays North of the border are rare, I hadn’t expected to be blogging on Livingston for the second time in three days.  But a development between the club and the Supporters Trust warrants comment.

Livingston are facing an uphill battle (1), and one in which they are currently fighting from a position of weakness, so it is good to see that not only have they manged to acquire a new sponsor (2), but they have announced a new deal between club and Supporters Trust (3) which Chief Executive (of the club) Ged Nixon describes as ‘Win-Win’ for club and Trust.

In a nutshell, the Trust will fund the purchase of merchandising for sale to fans in return for shares, while the club will have the opportunity to turn a profit on the retail sale to supporters.  Hence ‘win -win’ – the Trust gains a larger shareholding, and the club doesn’t have to find the capital to buy new stock for the club shop, but can turn a profit on its sale to fans.

So, is this a model which should be adopted by other Supporters Trusts?  In many cases, yes, but the real answer to the question is ‘it all depends’.

What is being confused here, and in this posting so far I am guilty of increasing that confusion, is ‘club’ – the nebulous sociocultural construct – and ‘company which owns the club’ (see my earlier posting Subbing the company or the owner?).

An arrangement such as this one at Livingston is only ‘win-win’ for a Trust if they are happy to see the current board of the ‘club’ reinforced in their ownership (and there is no implication with respect to Livingston carried in that sentence).

But if the Trust wants to see the present board of the company out, as is the case at Halesowen Town or was recently the case at Merthyr Tydfil, it is definitely not a ‘win-win’ scenario.

In short, Trusts need to look at the broader strategic issues before rushing into what, at first glance, seems a ‘no brainer’.  A few months ago at Livingston itself, with company still being run by the previous owners under Angelo Massone, rushing into such an agreement would have been more a case of ‘no brains’ rather than ‘no brainer’.

Posted in Merchandising, Ownership, Trusts | Tagged: , , | Leave a Comment »

 
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