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

More on Bournemouth

Posted by John Beech on July 15, 2009

Bournemouth have been under a transfer embargo from the Football League for a year. The reasons for this were stated on 11 July by Vice Chairman Jeff Mostyn (1) to be:

  • the club’s debts to HMRC
  • the club’s debts to other football clubs
  • a ‘nominal’ debt to the Football League itself

All of these arose under the previous ownership, but the incoming owners will have been fully aware of them.

In the same report Mostyn is quoted as saying “The league believes that, if you are not meeting your financial obligations, bringing in new players, at whatever cost, is adding to your commitments and will make any repayment of debt more difficult, if not impossible. However difficult it is to stomach, it is hard to disagree with the philosophy.

Not only do I find it hard to disagree with the philosophy, but I have no difficulty stomaching it. What does Mostyn mean by “however difficult to stomach“? Does he mean that is his consortium, the club’s new owners, should be allowed to take on new financial commitments before clearing tax debts to the government?

He also said “In order to get the league to consider lifting the current embargo, we needed to demonstrate that we had an agreement in place with HMRC and I was able to satisfy them on this point.” The wording here is interesting – apparently having an agreement in place is sufficient; the debts do not have to actually be cleared for the embargo to be lifted.

Notwithstanding any objection I might wish to voice as a taxpayer, the position the club’s owners are adopting do not augur well for its future financial stability. Eddie Mitchell, incoming Chairman, told BBC Radio Solent on 23 June “I’ve just got to take a view that it’s got to be run like a business to give the club some stability over a period of time” (2).

Coming in to a club which has been struggling financially since going into Administration back in 1997 (with debts which included £450,000 in unpaid VAT and PAYE [The Independent, 30 January 1997]) inevitably means prioritising payments. To his credit, Mitchell stated that paying unpaid wages would be top of his priorities. Actually paying taxes does not appear to be his second priority however.

Two possibilities occur to me. Either the consortium took over the club with insufficient funds to be able to put the club back on a sound financial footing – rather worrying given the club has already had to fight this last season impeded by the docking of 17 points last season for failing to exit Administration into a CVA – or the consortium gives spending money a higher priority than paying overdue taxes. Her Majesty’s Revenue and Customs will not be amused.  They may have just given the club more time to pay (3), but Bournemouth must surely be drinking in the last chance saloon.

Advertisements

One Response to “More on Bournemouth”

  1. […] More on Bournemouth […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: