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

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.

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12 Responses to “Meanwhile, back at Bournemouth…”

  1. Paul Wright said

    Excellent article and Mr Beech certainly knows his stuff. I’ve supported Bournemouth for over 50 years, through thin and thin, and can’t believe what a financial mess the Club is in. This has been ongoing for a number of years, so one has an element of sympathy for the stance taken by HMRC and the Football League, even if it’s very frustrating for the fans. Having read previous posts on the plight of many other clubs, it makes me wonder how sustainable the 72 Football League participants are. Once one has gone to the wall, will this result in the domino affect? I look forward to reading more of Mr Beech’s articles in the future.

    • John Beech said

      A very interesting issue you raise, Paul. It’s worrying how many clubs professionalise as they climb the pyramid, but fail to revert to part-time status when they are relegated.

      The result is an increasing number of clubs with much higher wage bills. Although more money has poured into the game, the disparity between wealth at the top and at the bottom has grown, and clubs lower down are increasingly under financial pressure.

      We are not in an economic climate that can support an increasing number of clubs with higher wage bills. How many clubs will actually seize the mettle and revert to part-time status remains to be seen, but I suspect that some will go into Administration simply because they failed to face up to the fact that being fully professional was just unsustainable.

  2. John Payne said

    Like Paul Wright, I have been a supporter of AFCB spanning many years. For decades the club “enjoyed” a reputation of going nowhere in terms of league status; year after year in what was Division 3. Over the last decade, our reputation has evolved into one of ongoing financial mismanagement. Even if we survive the immediate financial crisis, what does the future hold? Can a business model be developed which will enable the club to thrive in the absence of financial largesse from some mythical benefactor? I doubt it, but there are several other clubs in a similar situation and sooner or later the pack of cards must collapse.
    I do not have a solution, but I do believe a step in the right direction would be to revert to the old 3rd Division North/South split and go part-time. One only has to look at the geographical spread of current League 2 clubs to realise just how much it costs AFCB to trek north virtually every away game and for the club to suffer financial loss on home games with visiting clubs only bringing a handful of supporters. Cutting the cost base and generating local interest amongst supporters would surely help? In my opinion, the marginal cost of earning income from larger numbers of visiting supporters is the only prospect we have of approaching self sufficiency.

    • John Beech said

      A return to 3N and 3S would definitely be a step in the right direction, as would the implicit regionalisation of the current Conference National that would need to follow.

      There are too many fully professional clubs, but quite how we would see that reduced is a major problem. So long as there are people like Rob Yong at Eastwood Town in Tier 7 (1) willing to ignore the sporting ethic and press ahead with trying to distort the balance of competition by throwing money at a club, I’m afraid we won’t see clubs act collectively to wind their unsustainable excesses in.

    • Paul Wright said

      I think John (Payne) has made some very sensible suggestions and I’m pleased these have been backed up by John (Beech). I seem to recall that, in the past, the vast majority of football league managers have expressed their opposition to the regionalisation arguement. I can’t honestly see the logic of their reasoning. It’s my perception that there’s no clear strategic thinking or talking being undertaken by the FL about the plight that faces the majority of our soccer clubs. Please tell me I’m wrong!

      • John Beech said

        Sadly I think you are absolutely right. In many respects the various Leagues fail to think like leagues (us), rather they just promote the most popular line of individual members (me, me, me and me) – the dispute over the expunging of Chester City’s record by the Conference is a current classic example of this.

  3. John Beech said

    BOURNEMOUTH LATEST

    The club has now settled the £350,000 tax due to HMRC according to a brief statement on the club’s website (1), and the court appearance should be a mere formality.

    Where the money has come from remains unclear. Eddie Mitchell told the Bournemouth EchoI’ve raised the investment that was needed. I don’t really want to confirm any more than that, other than the fact we’ve sent the tax man that money. It’s really come from the support I’ve been shown since I’ve been at the club because if I hadn’t been shown that, I wouldn’t have been able to raise it. That’s one of the most important factors. I’m working hard for the club and I have secured an investment in the club to clear the debt – that’s as much as I can really say.

    Whether ‘investment’ really means that, i.e. the purchase of shares, or simply a loan which will have to be repaid with interest, i.e. replacing one debt with another one, is thus unclear.

    • John Beech said

      BOURNEMOUTH UPDATE

      The club is reported as having “raised approximately £300,000 after an early season-ticket sales drive” (1). Spending revenues from next season to pay off historic debts hardly constitutes ‘investment’.

      What might have otherwise been good news is that the transfer embargo has been somewhat eased (2). The challenge for Mitchell now becomes how to raise some of season 2011/12’s revenues instantly to spend on players presumably. There will be tears before bedtime.

  4. John Payne said

    I think the Club is going for broke – pun intended – in the hope/ expectation that they can raise some money at the end of the season by selling a couple of players. Otherwise, how can they expect to survive the close season when the greater part of next year’s season ticket revenue has already been spent? This old cynic has that AFCB deja-vu feeling once again! Will anything happen until a clutch of clubs go under?

  5. Paul Wright said

    The saga continues. I’ve just read a statement from Cherries Chairman Eddie Mitchell. I’m unsure how AFC Bournemouth can survive for much longer. We still owe £600K and it seems our current expenditure is well above our current income. Having collected a significant amount of 2010/11 season ticket money, which no doubt assisted in HMRC being paid off, what’s left in the cupboard – not a lot me thinks. No doubt this is just the tip of the iceberg! Hope I’m wrong, but as well as being an optimist, I’m also a realist.

    • John Beech said

      Statement reported here.

      The club’s transfer embargo has been lifted (2), but being allowed to spend money is not exactly what the club needs at this precise moment.

  6. John Beech said

    BOURNEMOUTH UPDATE

    The club have now paid off the last of debt due to the creditors of the old company (1). Let’s hope at least some of the revenues from season tickets is still available to the club. Next step, according to Chairman Eddie Mitchell, is to tackle the overdue rent.

    The club is, in my opinion, still not entirely out of the woods (mind you, they are not exactly alone in the woods!), but this is nonetheless a significant step forward.

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