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

Spotlight on Macclesfield

Posted by John Beech on December 11, 2009

Since the inception of regular movement of teams between the Football League and the Conference, we have seen many clubs yo-yo, in particular the step up proving problematic in the absence of rocket payments (qv). There are clubs which have come up and now seem to be almost part of the furniture however.  Such a club is Macclesfield Town, who have been a part of the Football League scene continuously since 1997.

This achievement has not been without its problems. Most notably, the club has had its own mini-scandal – Eddie Furlong was charged with improper conduct over the use of Football Foundation grant funds (1), but he had already been distanced from the club, having stood down as Chairman four years previously (2).

Macclesfield have been lucky to find backers prepared to put substantial amounts into the club.  By 2004, members of the board owned 75% of the shares, and brothers Amar and Bashar Alkadhi were in possession of almost half the issued share equity (3). Changes were made to facilitate the further issue of shares, and to allow an individual to own more than 50% of the shares.  The Alkadhi brothers, originally from Iraq, have made their money through involvement in the mobile phone business in the Middle East and Africa (4).

The Football Foundation problem resulted in a fine of £62,000, the requirement for the club to repay £195,000, and costs, bringing a total bill of roughly £300,000 (5) – a sum which might well have put paid to many a club at this level. The Alkadhi brothers promptly donated £30,000 to a fighting fund.

Bashar has been interviewed on the club website (6) and comes across as a genuine and committed fan of the club.

Last week the club issued a statement (7) which includes the following:

“In recent seasons the club has benefited enormously from the support of the club’s majority shareholders, Amar and Bashar Alkadhi and also from other members of the current Board via purchases of shares and the provision of loans that provided a degree of financial stability not enjoyed by the majority of other Football League clubs.

“At the end of the last financial year, the club’s Balance Sheet showed long term debts of £1.74m of which, approximately 75% represented loan payments made by Amar and Bashar Alkadhi. The majority of the remaining sum reflects further loans made by other Directors.

“The Board has today moved to strengthen the Club’s finances via a major switch of debt to equity by announcing that it will convert more than £800,000 of loans to the club into shares, a change that will significantly strengthen the Balance Sheet.”

It’s clear that Macclesfield would not have achieved what they have without the generosity of, in particular, the Alkadhi brothers, and their willingness to convert debt to equity, removing the threat of even ‘soft’ debt, must be seen as a major positive from the club’s perspective.

Why then might my joy on behalf of Macclesfield fans be not unmitigated?

The benefactor system at Macclesfield has worked well so far because it has involved a number of benefactors.  My worry would be that the balance of power has now shifted heavily towards the two brothers, ironically, it must be said, through their generosity.  While I have absolutely no reason to question their continued committment and largesse, it is only too clear from a wide range of examples at other clubs that a uni-benefactor model can prove unsustainable for a range of reasons – loss of interest, loss of fortune, growing old and handing on shares to less committed relatives, etc.  etc.

Another weakness of this approach to running a club was brought home to me by a revealing comment by Kettering Town’s uni-benefactor and Chairman Imraan Ladak this week (8). Stung by criticism from fans of his sacking of Assistant Manager John Deehan, Ladack said “It’s very close to a million pounds I have put in over four years. For people to turn against me after what I’ve done, that’s an incredible lack of loyalty from some.” An understandable reaction from his personal perspective no doubt, but he seems to have missed the key point all along – fans are loyal to clubs, not owners.  Their loyalty is not therefore something which can be bought, and any perceived loyalty to an owner is only as strong as the success which the owner achieves.  An even more striking example of this is the recent criticism of Steve Gibbson who has reportedly sunk (and lost) some £60 million into Middlesbrough.

If you want to be a benefactor, you need to recognise the fact that you must be prepared to lose large amounts of money in your hobby interest, an interest which is far from uniquely yours, and that ultimately you will never own the ‘club’, merely the company.  There will be some good times to be had along the way, and a sense of celebrity, but that sense of celebrity is truly vicarious – at best you can bask in reflected glory.  If there is no glory, on the other hand, you cannot dodge public opprobrium.


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