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 March, 2010

Developments at Wrexham

Posted by John Beech on March 30, 2010

Readers may recall that I have blogged on the farcical attempts of Wrexham’s owners to paralyse legitimate (as well as objectionable) discussion on the RedPassion message board (see RedPassion muzzled).  Excellent news – Gamlins, the solicitors acting for Geoffrey Moss, have now been “instructed to unequivocally withdraw all legal threats” to the board Moderator on fulfillment of two conditions (see 1 for an agreed statement).  The two conditions had already been agreed by the message board’s Moderator a few weeks ago.  Good to see common sense prevail, with hopefully the positive outcome of improved communication from the club.

In an entirely unrelated event, previous owners of the club, Mark Gutterman and Alex Hamilton, faced a private action in court today (2) brought by the Department of Business, Innovation and Skills (BIS).  Gutterman has agreed to being disqualified from becoming the director of any company for a period of seven years (3), and thus automatically fails the Fit and Proper Person Test.  Hamilton is however fighting the action, so ‘watch this space’ for further news.

Gutterman and Hamilton had taken over the club in 2002 “with the sole intention of making as much money as possible for themselves from the land on which the Racecourse Ground stands” (4).  Their plans to sell off the club’s ground for supermarket development failed, but not before the club had been placed in Administration, with the unfortunate distinction of being the first club to be docked 10 points for this.

A double dose of good news for a change!

Posted in Assets, Ethics, Fit and Proper Person tests, Stadium | Tagged: , , , | Leave a Comment »

Maradona injured

Posted by John Beech on March 30, 2010

According to a report in the New York Times (1), Maradona has had to undergo surgery after his dog bit him in the face.

The report describes him as ‘not seriously hurt’, so I trust I can be forgiven for commenting that this is surely a case of The Mouth of Dog avenging The Hand of God.  ;-)

Posted in Uncategorized | Leave a Comment »

A scarcely noted Football League failing

Posted by John Beech on March 30, 2010

While the media have focussed strongly on the failings of the FA in the last week and disseminated the calls for reform from a wide variety of sources, scant attention has been paid to a very basic failing by the Football League – its refusal to increase ticket allocations for Carlisle and Southampton fans to the League Cup final last Saturday.

Southampton were allocated 44,000 seats, which were all sold well before the match (1).  Carlisle had to cope with a 13:30 kick-off on the day the clocks had just gone forward, and the number of coaches that travelled overnight showed their fans’ dedication.

On the day a superb turn out of 73,476 was recorded, with the League crowing “That’s more fans than were in Istanbul last season to watch the final of the UEFA Cup, between Shakhtar Donetsk and Werder Bremen and more than watched the domestic cup finals in Italy, Spain and Holland.” (2).

True, but why were there still blocks of seats unoccupied with fans eager for tickets?

Click to enlarge

A lonely steward contemplates the 73,476 spectators in other parts of the stadium

The League were certainly neither keeping fans happy by refusing further tickets, nor were they revenue maximising – a lose/lose scenario if ever there was one.  Yes, I appreciate it would have tipped the balance of support even further Southampton’s way, but that is the sort of issue which the FA should have thought about when they decided not to move the national stadium to a more equitable location.  The choice of date hardly helps with equity in any case.

All of that said, it was a tremendous event which I thouroughly enjoyed (even as a Pompey fan!).

[I was there by the kind invitation of Supporters Direct.]

Posted in Fans, Football Association, Football League, Revenues, Stadium | Tagged: , , , , | 5 Comments »

Close shave for Forest Green

Posted by John Beech on March 29, 2010

According to a statement on their club website (1) “Forest Green Rovers Football Club Limited has reached an agreement with the Inland Revenue [sic] over an historic tax liability amounting to £45k“.

On 8th March the club issued a statement indicating that a financial crisis was imminent (2).  It warned “Everyone needs to recognise that the stadium complex, which opened in 2006, required additional funds to complete its construction and fitting out. These had in part to be financed from commercial loans, and the Board had ensured that these  were serviced. One plus side of the fall in interest rates was that the capital on those loans has reduced much quicker than anticipated. However, other activities in the company have had to be supported by the directors through personal loans. This could not carry on indefinitely and now the company needs to search for new investment.”  The immediate situation of a cancelled Chester City game and multiple postponements because of bad weather was hardly helping.

Much of Forest Green’s history had been one of obscurity.  The club had emerged from the Gloucestershire County League, reaching the Conference in 1998.  Comparisons with Histon are tempting – Forest Green being a small village just outside Stroud (so small that it is not even listed on the AA’s route finder).  Stroud however has no ‘United’ or ‘City’, but both Cheltenham and Gloucester are roughly ten miles away.

Their rise up the pyramid had two direct consequences.  First of these was the building of the New Lawn stadium.  This had been a subject of controversy as the land used included portions of the playing field of a local school (3).  Planning permission was finally granted in August 2004 (4), as was outline planning permission for 66 homes on the site of the old stadium.

The stadium, with a capacity of just over 5,000, opened in the summer of 2006.  The best gate to date has been one of 4,836, but current average is 869 (5).  Revenues from the stadium were boosted in 2007/08 by a ground-sharing agreement with Gloucester City (6).

At the start of the current season, the club decided to switch from being a limited company by guarantees of its members to a limited company guaranteed by its shareholders (the second consequence) (7).   The declared intention of this change was to seek a further £100,000 investment by the issue of new shares. Early this month it was announced that this figure had nearly been reached, but further investment was needed (8).  It quickly emerged that he need for further investment was because of a pressing tax bill of £42,000 (9).  As Chairman Trevor Horsely put it, “We are in dire straits – we’ve had one or two hiccups over the last couple of years and things have come to a head now. We’re struggling to meet the debts we’ve incurred on the new stadium and we need to put an appeal out to the local community. The Inland Revenue want answers by Monday. It’s a historical debt – we’ve made some mistakes on players’ expenses and managerial expenses and didn’t pay VAT on the gym when it first opened because we didn’t think we had to. We’ve got it down to £42,000, having lost three (home) fixtures. The best option for me is to sell the club to a majority shareholder.”

He added “The problem with Administration is that we’ve got four key directors who’ve put in loans of over £80,000 and I don’t think it’s fair on them. It’s always a possibility but it’s not the shareholders’ wishes.

In another report he said “We’ve had two of these orders [from HMRC] in the past three months but have managed to fight them off.  We need to find £200,000 to £300,000.  We need about £100,000 immediately for the Revenue and wages and the other £200,000 by the middle of the summer for the other creditors.” (10)

Hmmm.  A rather large problem then, and one that could not have crept up quite as suddenly as information fed to the press would lead you to believe.

The statement on the club website which I began by quoting continues “Though this removes the immediate threat of any legal winding up action, their Chairman – Trevor Horsley states “the club is a long way from being safe” although it is “business as usual” .” I wouldn’t dispute that the club is a long way from being safe, but can ‘business as usual’ really be a way out of the impending crisis? At least the Supporters Trust seem to be taking a more realistic view – see their statement here.

What I see is a club led by benefactors with the best of intentions who have inadvertently led the club into an unsustainable position, with pockets insufficiently deep to see their dreams come true.  Sadly this is an all too common scenario.

Posted in Benefactors, HMRC, Insolvency, Ownership, Stadium, Trusts | Tagged: , , , , , | Leave a Comment »

A funny old week in football governance

Posted by John Beech on March 26, 2010

The week started badly enough with the surprise resignation of Ian Watmore as Chief Executive of the FA (1), swiftly followed by a typically decisive FA reaction, to appoint current chief operating officer Alex Horne on a temporary basis until December in his place (2).  This has been followed by a major round of conspiracy theories, some of which may even be true.  It is clear that there are major problems in football governance related to conflicts of interests.  Not that these are new – they can be traced back to 1888, when the various cup competitions organised by the FA provided insufficient matches to support the emerging professional game, and a new Football League began the division of governance in the game.  This situation was of course only exacerbated by the breakaway of the Premier League twenty years ago.

At that time Wigan Athletic had barely been out of the Northern League ten years, and yet today they have the vast experience of almost five years in the Premier League.  Chairman Dave Whelan seems to have forgotten how recently his team was down there in Step 4. Speaking as if they were one of the venerable teams, up there with the likes of Arsenal and Everton, he quickly jumped onto the post-Watmoregate bandwagon to pontificate on what was wrong with football governance, and to suggest some solutions (3).

I would certainly agree with his diagnosis that “Watmore is merely the latest [chief executive to have been victim] of the chronic instability inherent in the way English football is run. It (the FA) is riven by conflicts of interest and people’s roles and responsibilities are either not defined at all, are blurred, or worse still, set up directly in competition with each other.”

His further analysis however I would most certainly disagree with.  He sees football as neatly divided into a professional game and an amateur game, and thinks that the FA should stick to governing the amateur game.

The division between professional and amateur is deeply blurred, with a swathe of clubs operating on a part-time basis, or with only a core of professional players.  This extends further down than the Northern Premier League whence Wigan recently came.

He also seems to suggest that a) the Premier League should be the governing body of the professional game, conveniently ignoring the Football League, and indeed the Conference and the Step 4 Leagues, and, in presumably an early attempt to secure my annual ‘Chairman Say the Funniest Things’ Award, b) the Premier League should be responsible for the England team!

Would that be the Premier League that has demonstrated its management skills by running up debts of over £3 billion between twenty of them?  Or the Premier League which has always shown such a marked reluctance to release players for international duties?

No, it would be the Premier League who would no doubt start paying clubs handsomely for the use of their players and handsomely compensating them for the most minor of injuries, leaching more money out of the game to feed their habit which Wyn Grant has neatly termed their addiction to money.

Mind you, the up side would be that the most expensive players would suddenly be consistently available.

Posted in Football Association, Governance, Premier League | Tagged: , , | 1 Comment »

Administration & ‘Absolute Bollocks’

Posted by John Beech on March 21, 2010

Not my words, I hasten to add; as if.

No, they are the reported words of Portsmouth Administrator Andrew Andronikou in response to allegations of vote-rigging in an IVA which he had previously been responsible for (1).  He has already been in the limelight in connection with the Portsmouth Administration when HMRC initially objected to his appointment.

Certainly what he is faced with is no simple matter.  Already one prospective club owner, Victor Cattermole, has been revealed (by the New Zealand Herald) as ‘a colourful character’ with a criminal recors and a string of failed companies (2).  Rob Lloyd, fronting a different bid for Pompey, insists that the man behind the bid must remain anonymous at this stage (3).

The lot of an Administrator is thus not an easy one, and it is inevitable that much of his negotiation with wannabe owners must take place in private.  That does however raise the prospect that, while justice may be being done, it is not necessarily the case that is being seen to be done.

The difficuly with this when it comes the affairs of companies in Administration is the stage at which transparency can reasonably enter the equation.  The problem, as I see it, is that full transparency doesn’t always seem to happen even in retrospect.

The current Portsmouth case is not alone as an example of where we may not get full transparency.  Other cases which spring to mind – and I emphasise that I am not questioning whether justice was done, but am querying whether it was uncompromisingly seen to be done – are Chester City (see posts passim), Halesowen Town (see posts passim), and Leeds United (where the club was seemingly bought back from the Administrator).

Unless we can develop a system which allows full transparency, at the very least in retrospect, we will not have a system that avoids contention and suspicion, and there will be the danger of a question mark hanging over some cases of Administration.  This strikes me as particular prone to happen in those instances where Administration is Voluntary.

Any thoughts from the legal fraternity?

Posted in Ethics, Insolvency | Tagged: , | 1 Comment »

The times they are a-changin’ 1

Posted by John Beech on March 19, 2010

Those expecting the usual dose of ‘Beech’s Bile’ are in for a disappointment with this posting, I’m afraid. While my overall perception of the English football management scene will no doubt trigger many more postings coloured with cynicism and sarcasm, I do sense a more positive zeitgeist beginning to emerge.  It’s early days yet, but let’s hope the positive signs of change grow from the current acorns.  In this, the first of a few semi-regular postings, I pick on a single news story that is, in my opinion, symptomatic of the beginning of significant change.  There’s a long way to go yet, but this story is one it would have been hard to imagine even a year ago.

Cambridge United has had a colourful history.  Back in 1970 they were new kids on the Football League block, but, having made the breakthrough to senior football, they have found it difficult to find a natural level (see here for a fine graphic).  They have enjoyed six promotions since then, but suffered seven relegations, and now find themselves back in the Conference.  The highest they reached was 5th in the old Division 2.

The lack of stability in the pyramid took its toll off the pitch, with the inevitable difficulty it created in financial planning.  Plans for a new stadium were approved ten years ago (1) and shortly afterwards a grant from the Football Foundation was approved (2).  This was not to be as the club slipped into debt (3), needing to take out a loan of £585,000 in 2003.  Just over a year later a sell-and-lease-back plan reared its ugly head (4).  Not surprisingly perhaps a Supporters Trust emerged, and by May 2003 were the club’s third largest shareholder (5).

Without this Trust, the club would have been in dire straits.  In January 2004 a record annual loss of £704,000 was reported (6), and by the end of the year selling the family silver became the only way forward (7) – the Abbey was sold to Cambridge United director John Howard’s company Bideawhile for just over £1.9m, and a minimum 50-year-leaseback at the Abbey at an annual rent of £200,000 agreed.  You can do the maths yourself.

The following month Cambridge Fans United announced plans to  buy the stadium back (8).

In April 2005 Bideawhile refused an offer of £2.2 million from the club (9), with the funding to have come through a loan from club director Johnny Hon.  By the end of that month, the club was set to drop to the Conference and had filed for Administration (10) with debts of £900,000.  A CVA was agreed in June, with creditors receiving 19p in the pound (11).

By the end of the year, there was talk of ground-sharing with local rivals City, and even merger (12).

In August 2006 new Chairman Lee Power again raised the subject of buying their stadium back (13).  By January 2007 the spectre of loan guarantors having to step in was on the agenda (14).  By March, new investors had appeared (15).

Since then, to cut a long story short, there have been frequent changes in the composition of the Board, and little movement on resolving the stadium situation.  More recently George Rolls became Chairman (16), only to depart and reappear at Weymouth.  There has also been a high turnover in club Managers, joining, leaving, and even rejoining.

This almost Maoist state of perpetual cultural revolution at Board level recently took a back seat for Cambridge United watchers, when Bideawhile announced that they were considering selling the Abbey to property group Grosvenor Estates (17), triggering a race against time for Cambridge Fans United to raise £350,000 and show proof of access to the remaining £3.15m needed to buy the stadium themselves.

What might at the outset have looked a hopeless cause has proved very much the opposite.  Within four days, pledges of £750,000 had been made  (18), and that figure has now passed the million mark (19).  The race is now on to raise the £350,000 (20).  More details are available on the Supporters Direct website, and watch the CFU website for the latest news.

Whether they succeed or not is, of course, a matter that only time will shortly tell.  But what to me is significant is the sheer speed and scale of gathering pledges – this is at a Conference club in a city with effectively two other clubs, City and Histon, remember.  With supporters like United’s, the future of English football begins to look just a tad more rosy.

Posted in Assets, Fans, Stadium, Trusts | Tagged: , , , | 7 Comments »

Meanwhile, back at Bournemouth…

Posted by John Beech on March 18, 2010

Yet another winding-up petition from HMRC is reported as being about to hit the club (1).  They are in arrears to the tune of £314,000, and had total debts earlier this month of £846,924 (2).  Shockingly, this is actually an improvement on earlier debt levels, not a new low.

Chairman Eddie Mitchell’s solution is to get the fans to bail the club out, or to be more precise to bail his company out.  Regular readers may recall a similar situation recently at Accrington Stanley (3), with the completely misleadingly named ‘Save our Stanley’ campaign – it should have been called ‘Save Stanley’s Board’.

Mitchell has called his scheme for dipping into fans’ pockets the ‘AFC Bournemouth Dedication Scheme’ a phrase that he might have borrowed from Spinmeister Ridsdale.  Do the fans get anything in return for donating?  Apart from a vague promise that the Bournemouth Echo describes thus ‘Should that debt be wiped out with the help of this scheme and through other revenue streams, donors would then have the potential incentive of receiving a possible return on their money if the club sells any of its assets, although there is no guarantee of receiving any cash back‘, no they don’t.  In particular what might, and in my opinion should, be offered is shares.  To put it another way, Mitchell expects the fans to help out but is completely unwilling to cede any control in the club in return.

Having visited Dean Court midweek last summer, I was taken by the enthusiasm of the fans I saw and commented “There was an air of activity to the stadium, perhaps reflecting the arrival of incoming Chairman Eddie Mitchell, and it was the only one of the three [I visited Southampton and Portsmouth on the same day] where there was a strong sense of involvement with the local community” (4).

Mitchell’s view is “What really made us think was after the fans’ forum, where I was approached by two people. One chap offered to donate £2,000 and another, a pensioner, offered to donate £1,000. We opened the post the following Monday and we had received a £25 cheque from a Fulham supporter and we received £125 from somebody else who donated. It led me to believe that there were a great deal of people out there that would like to join me and help get the club back to where it should be, with no or very little debts.   I don’t feel it is prudent for us to actually ask for money, but if we pledge to return the money from selling of our assets, however long it takes, then people are perhaps not donating, but they are more helping the club.”

It’s the last word of that quote that I take exception to.  They are being expected to help the company and its board rather than the club.  A share issue would allow fans to help the club.  Come on Eddie, let’s see fans getting involved rather than just subbing the owners.  When you took over the club, you were asked whether the club was actively seeking investment.  You replied: “We’d be very foolish not to” (5).  Well, here’s a golden opportunity to demonstrate that you are not very foolish.  Let fans invest rather than probably donate.

Posted in Benefactors, Debts, Fans, HMRC, Insolvency | Tagged: , , , , | 12 Comments »

Crawley Town and Farnborough in court today

Posted by John Beech on March 17, 2010

Court appearances over debts are becoming a bit of a regular Wednesday activity, and it’s a pleasant change to report some positive news.

First up this morning were Crawley Town over an unspecified debt to HMRC – case dismissed; the debt had been settled (1).  In fact, at the previous hearing when the club had been given a 28-day adjournment, ‘furious’ co-owner Susan Carter had protested that the debt had already been paid, at the end of January (2).  If this was the case, why was it still necessary to have a court hearing today, with all the additional expense that involves?  A statement from HMRC would be helpful, but no doubt they will stick with their ‘no comment on individual cases’ policy.

Next came Farnborough, a resurrection club, its previous incarnation Farnborough Town having gone into Administration and then folded as recently as recently as 2007 (3).  Again, case dismissed.  The disputed debt had been of the order of £3,000 to a coach company.  A statement on the club website (4) says: “In reality this matter never needed to reach this stage but we are delighted to have resolved the issue and look forward to a successful end to the season.

‘Never needed to reach this stage’ can of course be interpreted in two quite different ways.  That could be presumably be said of most if not all the recent cases.  For the record, we have seen in court since the beginning of February:

Crawley Town;  17 March; HMRC;  struck out

Farnborough;  17 March;  Guideline Coaches;  struck out

Portsmouth;  15 March;  HMRC;  already opted for Administration

Southend United;  10 March;  HMRC;  adjourned

Cardiff City;  10 March;  HMRC;  adjourned

Chester City;  10 March 2010;  HMRC; company wound up

Burscough;  3 March;  HMRC;  struck out

Portsmouth;  1 March;  HMRC;  adjourned

Notts County;  24 February;  HMRC;  struck out

Crawley Town;  17 February;  HMRC;  adjourned

Burscough;  17 February;  HMRC;  adjourned

Southend United;  10 February;  HMRC;  adjourned

Portsmouth;  10 February;  HMRC;  adjourned

Cardiff City;  10 February;  HMRC;  adjourned

Hinckley United;  10 February;  HMRC;  struck out

Accrington Stanley;  3 February;  HMRC;  struck out

['Struck out' means in each of these cases that the debt had been paid in full after the court appearance had been arranged]

Whichever way you look at it, this recent record of brinkmanship, tardiness and failure in paying debts, almost all to HMRC, hardly paints a glorious picture of the financial state of the football sector.

Posted in Debts, HMRC, Insolvency | Tagged: , , | 5 Comments »

Court aftermath

Posted by John Beech on March 14, 2010

The big court appearances of the last week are beginning to reveal their implications.

Cardiff City
It seems that I am not alone in having concerns about the way Peter Ridsdale has been operating the club.  A detailed report on WalesOnline (1) highlights the problems with the club’s claims that its players are an asset worth £30 million and that its net assets, i.e. the new stadium, are worth £36 million.

There may be better times ahead.  The long vaunted investment by Malaysian businessman Dato Chan Tien Ghee is reported by the News of the World (2) as on the verge of finally materialising.  A condition would be the departure of the Spinmeister, with a club source quoted as saying “Ridsdale must be removed from the helm for there to be a hefty investment.  He’s living on borrowed time“.  So, hopefully two celebrations are imminent.

Chester City
Cheshire West and Chester Council are moving to secure the Deva Stadium (3) for future football use, and City Fans United have been holding talks with local businessmen with a view to progressing the emergence of a successor club (4).

In a blatant attempt to stop the fan-backed bid however, Fodboldselskabet af 06-03-2010 Holding A/S (The Football Company) or Chester Projekt are reported as persisting with their unhelpful and misguided attempt to create their bizarre form of a resurrected club (5).  Let’s hope the Projekt Brønby website (6) will show those thinking of participating just how misguided the plans are.

Portsmouth
Unsurprisingly belts are being tightened by the Administrator, and their have been severe cuts among the non-playing staff (7) with 85 jobs lost, and two club shops closed (8).  Peter Storrie, the former Chief Executive, has also gone (9), the Administrator preferring a 100% pay-cut rather than the 40% cut Storrie had offered.

The plight of the ‘Pompey 85′, or at least up to eight of the training ground staff, has been taken up by David James (10), who is seeking a way that is legal and acceptable to the Administrator for their wages to be paid by the players.  He is also reported as being willing to take a pay cut to help the club (11).

James follows, as it happens, on the heels of Shaka Hislop, also a fighter for the rights of, in his case, his fellow Trinidad & Tobago players.  I had the pleasure of meeting Hislop a couple of years ago and was struck by his sincerity and integrity.

With Shaka Hislop and Simon Chadwick at the Play the Game Conference 2007

Between them James and Hislop offer an image of goalkeepers not as the eccentrics of the football scene, but as men of integrity in the game.

Southend United
Chairman Ron has responded to the club’s latest appearance in court.  In an official statement on the club’s website he says of the club’s court appearance “From what I have read so far I must have been in a different place” (12).  That would be Planet Martin I guess.

Consider this part of his statement: “In November I jumped through hoops in a very short timeframe to put a further investment of £2.35million in the Club (£2.15 to HMRC and a further £200,000 of working capital requirement). It wasn’t put in by some fairy godmother. Sainsbury’s may have written the cheque but ONLY against significant tangible security that I was able to put in place… They are not a charity. This was part of a wider transaction to deliver the Club’s Stadium and Sainsbury’s new store – a “partnership” that is well advanced.

Very short timeframe? Presumably he hadn’t been reading the demand letters from HMRC.

Further investment of £2.35 million?  There was me thinking it was a loan, not an investment, the security for which is reported as being £304,000 worth of shares in the club (13).

To deliver the Club’s Stadium and Sainsbury’s new store – a “partnership” that is well advanced? So how exactly has it advanced in the last ten years?

He continues: “My message to supporters of the Club is that I have a clear line of sight to deliver our mutual objectives and that is a new Stadium with increased income, capital investment and the ability to maintain a position in the Championship by fulfilling Southend United’s potential.
With the club in real danger of dropping into League 2 next season, his rhetoric is sounding more and more out of touch with reality, a reality which reportedly includes late payment of players on more than one occasion this season.

On he presses: “I accept it’s been a difficult season so far but – hey – it could have been a great deal worse … Crystal Palace and Portsmouth. Remember your Club does not have an overdraft and is only indebted to its parent company, i.e. me.

The point is that it could – hey – have been a great deal better if he hadn’t continued with his obsessive pursuit of the new stadium, of which he has admitted “The beneficial owners of the Fossetts Farm development are me and my immediate family” (14).

Posted in Benefactors, Debts, HMRC, Insolvency | Tagged: , , , | 8 Comments »

Around the courts

Posted by John Beech on March 10, 2010

Once again, on a day of much activity on the English football management scene, I find myself abroad, in a hotel room with a distinctly dodgy internet connection.  So here goes with what I have managed to surf against the odds.

Cardiff City
Of the remaining £1.7m of the HMRC debt which was the subject of the winding-up petition, the club has only paid off £850,000 (1 and 2).  The club has been given until 5th May, a generous adjournment of 56 days, to pay the now outstanding debt of £1.9m (it has been defaulting on its ongoing obligations to pay PAYE and VAT in the meantime).

Spinmeister Peter Ridsdale is remaining untypically silent, it being left to Elaine Palser, a club spokesperson, to make a comment.  She says that an Asian businessman will give [her word] £6m, but, as the Registrar, said “On the face of it this company is not able to pay its debts as they fall due.  The only basis, I’m being told, on which there is a prospect of this being resolved is through a third-party investor, but there is no evidence before the court“.  Time will tell who is right, but these are certainly deeply worrying times for Cardiff fans, as the club seems to have the needle stuck in its increasingly unconvincing groove when it comes to PR, and once again the board has failed to deliver.

Margate
As Jeremy Jacobs has already commented on this blog earlier today (3), the club has finally cleared all its debts to HMRC, and the winding-up petition served as long ago as April 2005 has finally been withdrawn.  It’s been a long struggle (the original debt was for £220,000), but the battle has finally been won.  Excellent news.

Chester City
In what is also excellent news, given all the circumstances, Chester City FC 2004 Ltd. has finally been wound up, the High Court doing the decent thing of putting the company out of its misery, when the Vaughan family seemed unwilling and unable to do the decent thing themselves.  This will surely lead to a family first – father and son banned under the FA Fit and Proper Person Test.
With the devotion to duty that the Vaughans have shown of late, no representative of the club bothered to turn up in court on behalf of the company.
This leaves the way clear for Chester Fans United to form a resurrection club (4) – they have already submitted an application to the FA.  Here’s wishing them every success.

Southend United
Another adjournment here, in this case one of 35 days (5).  I find this particularly odd as the club’s line has been that it is the sum which is in dispute – why should this then warrant any further extension?  Again, worrying times for the club’s fans, especially as the January wages had to paid by the PFA.  Will Chairman Ron next claim that this is simply because he disputes what the wages are?  He is not his usual chipper self it would seem – as I write, todays’ court appearance is being ignored on the club website (6).  Chairman Ron has of course been busy with other vital matters, sacking assistant manager Paul Brush (7).
I am beginning to feel more and more strongly that there will be tears before bedtime.

Overall the HMRC position comes over louder and clearer – we will give you time to pay, but ultimately we will draw a line in the sand; fail to pay by then, and it’s curtains.  Cardiff City and Southend United should take note.

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

Meanwhile, beyond Fratton Park…

Posted by John Beech on March 7, 2010

… and whichever City bar (that’s ‘City’ as in ‘City of London’) that the Red Knights hang out in,  there’s plenty happening, or not happening, worthy of comment.

Cardiff City and Southend United are both due back in court against an increasingly confrontational HMRC.  Spinmeister Peter Ridsdale has gone unusually quiet – how he survived an EGM is beyond me – other than to appeal directly to the fans to boycott a protest march (1), suggesting that they look themselves in the mirror, advice which he might consider himself.  Chairman Ron has not issued one of his legendary blogs for almost four weeks – can he really have decided that discretion is the better part of valour, or can we expect a rant against HMRC shortly, one of his more unusual ways of ensuring that his focus is “entirely on the bigger picture and delivering success to Southend United” (2)?

Other clubs crossing my radar recently include:

Billingham Town
The club, of the Northern League Divisin One, are facing a winding-up order over a debt of £10,000 due to Hartlepool United (3).  There is an issue of a ‘previous regime’ at Billingham, but the court appearance on May 18th could prove disastrous.

Birmingham City
It seems that the self-appointed People’s Anti-Debt Champion, David Gold, has, together with David Sullivan, managed to knock up an annual loss of £20m before selling Birmingham City, not helped by keeping the players on top flight wages and trousering ‘advanced management fees’ of £420,000 (4).  West Ham fans, be worried.

Bristol Rovers
Rovers latest financial figures show a loss of £1.72m and debts of almost £4m (5).  Chairman Nick Higgs says “Our financial performance for the season reflects both our investment in the playing squad and our lack of success in the cup competitions… This trading loss is unsustainable in the long term and relies on the support of the directors, both in terms of loans and equity.”  His response to this financial crisis?  “It also underlines the need to progress the stadium regeneration plan, which we are still putting a huge amount of effort into, and I hope to be able to make a positive announcement in this respect in the near future.”  Of course, a new stadium!  He is obviously wanting to follow the highly successful paths beaten at Southend, Worcester City and Darlington ;-).

Eastwood Town
A slightly older story this one, but certainly worth noting.  Chairman Rob Yong has said “I personally pay the players’ wages and any other money that comes in from the fans through gate money and the like goes straight into the club.  I’m very conscious that I don’t want to leave the club in any debt at any point – that’s the way it has been structured” (6).  Avoiding debt is of course admirable, but surely such blatant financial doping is hardly within the sporting ethic.

Farsley Celtic
Celtic are teetering on the brink following the failure of the John Palmer takeover (see postings passim), with games no longer being played (7).  A deeply disturbing aspect of this imminent disaster is that the stumbling block in negotiations proved not to be with the club’s creditors, but with the costs of its Administrator (see A forgotten cost).

Harlow Town
Regular readers will know that I am no fan of the benefactor model, essentially because of its vulnerability to benefactor withdrawal.  At Harlow there had been something of an impasse in the running of the club as a result of the breakdown of the marriage of the Bothwells – sad for the people involved, but ludicrous that it should impinge on the running of the football club.  New owner Tommy Cunningham has ‘big plans’ for the club (8), always a worrying signfor a club, especially for one with financial problems (9).  His plans have included bringing in many signings (10) and sacking the manager (11).  I wonder if he ever considered stability and consolidation as options.  Presumably not.

Sheffield Wednesday
We are told that the the club is ‘not heading for Administration’ (12), something which I find only slightly more reassuring than a Chairman saying he has ‘complete confidence in his manager’.  Talk is of a take over by an American investment group.  Well, such groups do have a recent track record of course.

Stockport County
Better news here for a change.  An agreement has finally been reached for the Melrose Consortium to take over the club, although this is still subject to approval by the Football League (13).

Weymouth
Latest saviour of the Terras, George Rolls, is seeking a CVA (14).  His offer of 9p in the pound over 5 years is not likely to prove a tempting one to creditors, which include Barclays Bank, and, you’ve guessed it, HMRC.

Off my regular patch, the saving of FAW Caernarfon Town is duly noted, with the strong involvement of the Friends of Caernarfon Town FC, a consortium of officials, supporters and former players (15).

And finally, partly back to Fratton Park, but partly to West Leigh Park, home of Havant & Waterloovile (16).  Pompey Supporters Trust are working on not one but four business plans, covering a variety of contingencies, including losing Fratton Park.  More power to their elbow!  What a pity that certain Chairmen don’t have the wit to think beyond Plan A.

Posted in Benefactors, Debts, Ethics, HMRC, Ownership, Stadium, Trusts | Tagged: , , , , , , | 8 Comments »

Portsmouth’s latest day in court

Posted by John Beech on March 2, 2010

If you were hoping that the latest confrontation between Pompey and HMRC in the High Court might bring resolution, or even clarity, then I’m afraid you were in for disappointment (the best coverage of events was by the Portsmouth Evening News with its live blog and here).

As Gregory Mitchell for HMRC put it: “‘The question which we and indeed supporters of the club and members of the public ask is how is it possible that this once great club has become insolvent so that its liabilities its assets by £65 million“.  Good question, but was the High Court really the place to ask it?

He conceded that HMRC supported Administration in principle (well, he would, HMRC having provoked it, and having much to lose by the alternative, liquidation) but stated that HMRC had three issues:

  1. the validity of Administration
    His case did not strike me as clear from what was reported, and seem to really be a summary of the other two issues.

  2. the independence of the Administrators
    This was an unusual point to raise.  With the increasing occurrence of both Pre-Pack Administration (2) and instances where the original owner has bought the company back from the Administrator (e.g. at Leeds United and Chester City), it is certainly an interesting point to raise, but quite why the case of Portsmouth should be chosen for some kind of test-case is far from obvious.

  3. the feasibility of Administration
    Again, an unusual and interesting point, but was this court appearance the right place to raise a matter with such wide possible ramifications?

The difficulty he found in putting his case was summarised thus: “‘We accept that there may be a valid appointment. It would be wrong for the court to proceed today and hear our petition. But the question of validity is a matter that requires very urgent determination.  If there’s no valid appointment then the court would go on to hear the petition“.  This comes across to me as if he was more interested in investigating legal precedent than in pursuing Portsmouth.

Simon Barker QC, for Portsmouth, almost seemed to share this measure of uncertainty about moving into uncharted territory, preferring to stick to a predictable assessment of the situation from Portsmouth’s perspective: “‘There is no reason to impugn the conduct of these Administrators at all… The Administrators are independent. There’s absolutely no basis upon which the court should have any scepticism about their independence.

The stage was then set for some decisions that could appear in future legal text books as ‘case law’, but Judge Alastair Norris was not too keen to reach that stage just yet.  He said “There is a shadow over the administration that must be removed… There is a prospect, but no more than a prospect, that funding for Administration is available.”  With an increasing predictability he moved to his ruling – a hearing in the week commencing March 15, by when Portsmouth has to lodge papers clarifying their financial support from Balram Chainrai and the payments between the club and Portapin, Chainrai’s company.  This will at least clarify ownership of Fratton Park.

All in all, a bit of a damp squib for Pompey fans, and, I suspect, for legal buffs who had hoped for a definitive ruling.

Tomorrow we have HMRC v. Cardiff City, Southend United and Burscough, plus Chester City 2004 on the 10th.  Whether these cases will shed any light on how HMRC really sees the way forward in its pursuit of recidivist football clubs we shall have to wait and see.

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

 
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