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! Football Finance

Double blow for Charlton

Posted by John Beech on April 19, 2009

Charlton Athletic have been relegated (1). This further relegation for a club which was in the Premier League as recently as 2007 places then in the company of Barnsley, Bradford City, Leicester, Leeds, Manchester City, Nottingham Forest, Oldham Athletic, Queens Park Rangers, Sheffield Wednesday, Swindon and Wimbledon. Southampton are currently candidates for inclusion on the list.

It’s not just a matter of pride – it’s a matter of probably reduced gates, reduced revenues, and reduced sponsorship income as well as reduced broadcasting income. Charlton have already taken action financially by planning to reduce their staffing levels (2), this in the context of an annual loss of £11.5m (3) – cuts would have been necessary if they had stayed up.

What I see as the second blow to the club is the fact that they have sold their training ground, the Community Trust’s Charlton Park rugby ground and the youth academy’s Pippenhall sports ground, albeit to directors of the club, and on a lease-back basis (4). The deal will give the club £1.5m of much needed working capital, but burden them with as yet undisclosed lease payments.

Club Chairman Richard Murray pointed out: “The three key points are that the assets are in friendly hands, it’s a 25-year lease, and if the club wants the facilities back, it can buy them back”.

The first and second points together would leave me feeling rather worried if I were a Charlton supporter. 25 years is a long time in football, and the hands may not be so friendly continuously over the next twenty-five years. Benign though they are now, circumstances may well change. When Millmoor was handed over to Ken Booth at Rotherham in 2005 (5) to write off so-called ‘soft debt’ to the outgoing Chairman, who had for many years been the club’s benefactor, few would have foreseen that his sons would screw the club down over rental to the extent that it ended up moving out of not only Millmoor but Rotherham itself. Another example is the case of Wolverhampton Wanderers, where Sir Jack Hayward poured in as much as £40m subsequently written off – benign by any standards. Where once there were four members of the Hayward family on the Wolves board, today there are none however – the Hayward hands are gone.

Richard Murray’s final point is that the club can buy the facilities back, but how realistic is that? Certainly not in the short term, and it would take a major reversal in Charlton’s fortunes for them to be able to afford to.

The club survived its major financial crises of 1983 and 1984, so here’s hoping they can bounce back financially again.


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