Another fan rescue

Following on from my posting yesterday, it is interesting to note that another ‘fan rescue’ has taken place this week, and one which may well have seen a club survive rather than fold, thanks to the generosity of one (or possibly  more than one) fan.

The matter had become public back in March, when Hartlepool United (singular since 1968 when the two boroughs of Hartlepool and West Hartlepool amalgamated, in case you’re wondering) raised a winding up petition against Billingham Town (1), who play in the Northern League Division 1.  The connection between the two clubs is that Hartlepool reserves play at Billingham’s Bedford Terrace ground.

As an outsider it’s quite difficult to get a sense of right and wrong in the dispute, and the two parties themselves do not agree on the facts.  Hartlepool have been seeking a sum of £10,443.97, and Billingham have been, and continue to be, seeking to distance themselves from the debt, saying it had been incurred by the ‘previous regime’.

According to the Billingham website, Hartlelepool had invested in the redevelopment of Bedford Terrace, but “in 2009 things turned sour with Hartlepool and [sic] when they took away the goalposts prior to Town’s first game of the season. Town’s committee hurriedly obtained some temporary posts and the game against Bishop Auckland took place.” (2)

Hartlepool responded to the story breaking with a detailed statement here.  One thing which seems indisputable is that the dispute between the clubs had been simmering for some time.

It has been in and out of court over most of the last year, and in October Billingham turned down the offer from an anonymous fan to pay off the debt (3).  The situation is complicated by the fact that Stockton Council own the freehold to the ground.

Matters came to a head this week.  The money has now been paid, and according to Billingham, “Hartlepool United have apparently found ‘a third party willing to make payment in full of all sums claimed under the winding up petition’. This was nothing to do with us and we do not even known the identity of that third party.” (4).  The Hartlepool version of events (5) refers to “third parties who did not want to see [Billingham Town FC] wound-up“.

My take on all of this is not to take sides – I don’t know enough of the facts – but rather to wonder how a customer, or customers, (i.e. fan, or fans) should step in to save a business (i.e. Billingham).  It just doesn’t happen in other business sectors.  It certainly doesn’t surprise me that a fan or fans should feel that strongly about their club.  What strikes me though is how again the fan proves to be the crucial stakeholder in the survival of the business, something which many a board should take note of.  Too many boards show a depressing indifference towards fans, an attitude which I find strange on business grounds alone.

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A very merry Christmas and a happy New Year to all the blog’s readers.  Postings may be a tad patchy over the next week, but normal service will be resumed very early in the New Year.

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Green Army to the rescue

It’s a shameful state of affairs when a business can’t even pay its lower-paid workers on time at Christmas.  All the more shaming that its customers should step forward to the rescue.  That may not be an analysis that immediately occurs to a football fan, but that is precisely what has happened at Plymouth Argyle (1).

Argyle fan Ian Newell, through PASOTI (Plymouth Argyle Supporters on the Internet) have started a campaign to raise money for the club’s non-playing staff, who were paid late in November, and for whom there is uncertainty over their December pay cheques.  As Ian puts it, “We want to help the lads and lasses who we see every other week at Home Park, but we also want to show to people like Sir Roy Gardner [chairman], and Keith Todd [executive director], that the normal rank and file fan seems to think more of their staff than they do.  The Plymouth directors should hang their heads in shame for what has happened to this club and the way they have treated their staff.”  Well said Ian.

The club offers the following on their website, describing what happened following the extension to HMRC’s winding-up petition until February: “The club then applied for a validation order to allow us access to our banking facilities, which had been ‘frozen’ pending the winding-up hearing.  On Monday, we were duly given limited access to our account, enabling us to carry out transactions essential for our immediate trading needs.  This meant we were able to pay a majority of the Home Park office staff in full; however, the playing staff and some office staff have received a partial payment.” (2)  Which is fine as an explanation, but certainly doesn’t constitute an excuse.

Three cheers for Ian and PASOTI, and three boos for Sir Roy and gang.

Not that this is a unique occurrence.  Pompey fans stepped in earlier this year to pay club creditors St John’s Ambulance when the club went into Administration (3), as did Crystal Palace fans (4).  And see too A good news story? for football club staff so loyal that they were willing to take a ‘pay holiday’, where I cited five instances.

It’s a shameful state of affairs in any business sector that this should be a worryingly often repeated incidence.  It’s not exactly the case that there isn’t money going into the game – it’s just pouring out in obscene amounts to an elite amongst the employees.   In the Christmas spirit, I would point out that David James and colleagues at Portsmouth did put their hands in their pockets to keep some of the ground staff away from the dole queue (5).  Again in the Christmas spirit, perhaps his greedier colleagues might like to think twice as they sit by and let their agents push their salaries up to even more ridiculous levels. Who knows – perhaps they might even donate to the fund.

DETAILS OF HOW TO MAKE A DONATION CAN BE FOUND HERE.

‘Good Rangers’ v. ‘Evil Rovers’?

The top of the Conference table intrigues me.  The top seven clubs come from right across the spectrum of football business models, from clubs whose fans can be rightly proud, through those that have been abused by boards past and/or present, through to clubs that engage in blatant financial doping and whose fans have seen the club become identified with a ‘benefactor’ rather than with a local community.

As I write, the top seven, in order, are

• Wimbledon
  The exemplar of how fans can run a club successfully.  Their story is so well known it doesn’t need repeating.

• Crawley Town
  Southern League champions in 2004, and since then they have managed to stay up in spite of several sets of points deductions.  Their recent history off the pitch has been one that you would reluctant to wish upon you deadliest rivals.  A brace of Administrations (in 1999 and 2006), being pursued in court by HMRC as recently as last July (1), and a string of owners.
  The most recent is Bruce Winfield, together with Susan Carter, who has produced a ‘war chest’ for the purchase of new players.  Manager Steve Evans was happily spending money throughout the summer transfer window on a scale virtually unprecedented at the Conference level.  One failed attempt to buy success was a cheeky knocked-back try at purchasing Wimbledon’s captain, Danny Kedwell (2).
  All in all a somewhat colourful history off the pitch.  The mystery surrounding the war chest, and who the investors are, to me puts a measure of uncertainty over the sustainability of their current business model.

• Luton
  A club much abused by its previous owners.  The new ownership team inherited the massive points deduction, but things seem to have finally bottomed out, and it looks as if it will not be too long before it is back in the Football League.  Its home gates would not be out of place in League 2; in fact, they would be the second best!

• Newport County
  Not the original club, which disappeared in 1989 thanks to the shenanigans of one Jerry Sherman.  The resurrection club has had to claw its way back up the pyramid, including a period in significant exile and an attempt to have them kicked out of the English pyramid.  The club is now roughly 20% owned by the Supporters Trust.

• Fleetwood Town
  A club with a very chequered background, and many football fans will still be wondering ‘who?’.  The club is owned by Andy Pilley, also the owner of Commercial Power, who sponsor the club’s shirts.  Commercial Power has some interesting approaches to the conduct of its business – see (3) and (4).
  The club went full-time last summer and a £4m stadium redevelopment is under way. With home gates at just under an average of 1700 this season in spite of the club’s success on the pitch, I fear that, for fans, there may be tears before bedtime.  The financial doping may prove unsustainable.

• Kidderminster Harriers
  A club in meltdown.  It was reported last month as having debts of £250,000 and has been in and out of court at HMRC’s behest for much of this year.  Although they had a winding-up petition dismissed earlier this month (5), its other debts are only sustainable through handouts from the owners (6), and there seems to be a shortage of those willing to pick up what has become a poisoned chalice (7).  Short of a new local millionaire suddenly riding to the club’s rescue, Administration is looking increasingly likely.

• Wrexham
  A club which famously had to take its own Chairman to court to regain ownership of its ground.  Even today there are concerns over its future (8).
  There has been talk of the Supporters Trust taking over the club (9), but relations between owners and fans have not always been good.

By the end of the season we will of course have one club as champion and automatically promoted, and four into the playoffs.  The battle to be promoted will be fascinating to follow with its business model overtones, especially if these remain the seven clubs in contention.  Will ‘good’ triumph’ over ‘evil’?  That is of course oversimplifying, but I will find it difficult to remove considerations of their business models from deciding who I want to be promoted.

HMRC’s Christmas party

I’m guessing that there will be dancing in the corridors at HMRC’s office party this Christmas.  They’ve had a good run in the courts over the last month against various football clubs.  So far this run has not included a single outcome of the club going into Administration (the last case was Dundee in October; see 1).  This might suggest a shift in attitude by football clubs towards HMRC, but I’m not so optimistic.  The evidence varies considerably across the clubs involved:

• Hull City
  Hull have been skating on thin financial ice for some time now.  As the crunch match against HMRC approached, their bacon was saved by the expediency of new owners, the Allam brothers (2 ).  The £1m tax bill they are reported to have paid off needs to be seen in the context of debts of £5m to Barclays Bank and a further £7m in outstanding transfer fees (3).  A more recent report has the Allams paying a further £20m on taking over the club officially last week (4).  This is all good news for the club’s fans in the short term, with the immediate pressure off the club, but there will have to be drastic changes in the club’s business model if the haemorrhaging of money is to be stopped.

• Plymouth Argyle
  As things stand currently, the club has just started a 63-day reprieve from the winding-up petition served by HMRC over a total of £700,000 in unpaid taxes (5).   As with Hull, a major change in business model is essential, probably achievable only through new ownership.  One piece of good news is that the spinmeister, Peter Ridsdale, is now longer involved in a possible takeover bid (6 and oh so many postings passim).  Hopefully the suicidal idea of a World Cup stadium will now finally die a death (see previous posting Are we going stark stadium bonkers?).
  The current board has appointed a financial adviser to help them (7), but fans might not feel greatly relieved as his background is at Southampton.
  The winding-up petition from HMRC has been adjourned until early February, but, with the prospect of cashflow problems because of the weather (8), things are not looking good.

• Sheffield
  That’s not as in ‘Wednesday‘ or ‘United‘, but as in ‘Sheffield F.C. The Oldest Football Club In The World Est 1857 Ltd‘ as the company is known, who play in the Northern Premier League First Division South.  Trading on their (debatable) heritage hasn’t worked for them, and they were up in court against HMRC last week (9) – petition dismissed as the club had paid up.
  The club are planning a new ground (oh dear) and museum (well, maybe).  Like Plymouth they had hoped to piggy back 2018WC, but the club has a Plan B which they hope will still go ahead.  Time for a less ambitious Plan C perhaps

• Sheffield Wednesday
  Matter here seem to have resolved themselves for the short and even mid term through a takeover and bail out by Milan Mandaric (10), who has cleared the £1.1m tax debt HMRC were pursuing.
  The only worry I would have as a Wednesday supporter would be his sense of long-term commitment – this is not his strong point, as fans at St Louis Storm, FC Lika, San Jose Earthquakes, Charleroi, Nice, Portsmouth and Leicester City can attest.

• Welling United
  Welling, who play in , have been facing along term battle to pay off their debts, which had been as high as £90,000, to HMRC (11).  The club was back in court again at the beginning of this month (12), and given a further fourteen days to come up with the outstanding £60,000.
  The debt has been cleared through a very effective campaign of seeking loans (13).  This does not of course clear the debt, and the underlying financial problems are not resolved.

• Windsor & Eton
  Up in court earlier this month, the club was granted a 56-day adjournment (14).  Hopes are pinned on negotiating a CVA and a possible new owner.
  A disputed figure of £48,000 tax debt has been quoted (15), dating back over five years.  Other debts of £87,000 were reported in October (16).
  What is likely to happen next remains unclear, but a small bet on the appearance of an Arab billionaire who doesn’t actually exist might be worth a punt.  😉

Plymouth and Welling in particular have not really resolved the issue of insufficient cashflow, and must be worried by the weather forecast (see Jack Frost and the threat to club finances).

My records show that historically the incidence of a club going into Administration rises during the season to reach a small peak in November, falls back slightly, but then rises steadily from January to a high in May.  Again, perhaps time for a modest wager here.  😉

To round off by returning to the HMRC perspective, during December they were also active pursuing two clubs in Northern Ireland – Newry reached an agreement with HMRC (17), and Glentoran have until mid-January to resolve tax debts reported to be around £300,000 (18).

As we are entering the period of mandatory jollification, I thought a competition might be in order (as my Christmas motto is ‘Bah Humbug’, there will be no prizes though).  So the challenge is to suggest the most appropriate song to be played at the HMRC office party for its staff working on football club cases…

FSF Writer of the Year Award for 2009/10

As this is after all a personal blog, I hope readers will allow me this self-indulgence.  This morning I was presented with the Football Supporters’ Federation Writer of the Year Award by their Chair Malcolm Clarke.

The funny angle reflects not our drunkenness but rather the fact that Malcolm is very tall!

I must say, I’m dead chuffed!  I’m particularly pleased to receive an award from the FSF as I really appreciate the voice they have given fandom.  Their campaigns on behalf of individuals and for all supporters deserve widespread praise.

[Video available here]

Manchester City’s aspirations of global hegemony?

Manchester City are the latest addition to a strategic alliance of football clubs across the world which Atlético Madrid have been building.

Atlético’s international agreements go back as far as November 2009, when they started to collaborate with Shanghai Shenhua of China (1).  Collaboration was essentially sporting, with the use of player loans to gain playing experience.

The pace at which Atlético is developing strategic alliances has stepped up a gear of late: recently Atlético has signed up Muangthong United of Thailand (29 Oct; 2), Al Ain of UAE (12 Nov; 3), Raja Casablanca of Morroco (30 Nov; 4), Club América of Mexico (unknown date), and now Manchester City (8 Dec; 5).  Targets for further expansion are reported to include Brazil (Atlético Paranaense , Palmeiras and Internacional), USA (Red Bull New York, San Jose and Chivas USA) and Japan (Yokohama Marinos and FC Tokyo).

Not surprisingly the emphasis within this alliance is no longer so clearly sporting (6).  To quote David Redshaw of A Different League:

The pioneering scheme aims to seek sponsorship and expand each club’s image to all continents while sharing information on players through a wide scouting network. It also comes at a good time for Atlético as they need investors to help finance the construction of their new 73,000-capacity stadium, La Peineta, which will cost around £175m. The club hope to move in for the 2012/13 season and there are also plans to build a state-of-the-art sports city in the Alcorcón area of Madrid.

He also reports that Atlético have asked La Liga if they can play home games at 12:00.  This would allow their games to be shown live at peak times in the Far and Middle East.  Amazingly, Atlético “received a favourable response from their own supporters clubs who have agreed the change of hour is the way forward“!  There’s more: “a pre-season tournament involving all ten is already being lined up before the start of next season“.

It’s the now increasingly familiar sound of the ‘untapped markets’ argument.  What seems to be being forgotten is the tapped market – loyal local fans.  Sport and business are troublesome bed fellows at the best of times, but surely it doesn’t make sense to kick one of them out of bed.  In any case, the need to boost revenues is rather less significant to Manchester City than to Atlético.  Manchester City have probably the most free-spending benefactor ever to grace the director’s box of an English football club.

But wait…  What’s that on the horizon?  Oh dear, it’s UEFA’s Financial Fair Play protocol.  To keep on spending at the rate Manchester City is becoming used to (see an earlier posting Manchester City following in Pompey’s footsteps), they are going to have to do something about boosting their revenues if they want to carry on being a Viv Nicolson (click here if she was before your time!).

Ironically, a measure designed to reign in spending unearned money may well result in a situation that leaves loyal fans fuming at how to raise the money for global air fares and having to reschedule their Saturdays during the main season to accommodate kick-off times, all for the benefit of new fans in the Far East.  Yet another example of what can only be described as the Harlem Globetrotterisation of English football.

How long before the Premier League is reduced to the ten teams with the richest benefactors endlessly touring the world playing exhibition matches in front of currently ‘untapped’ fans, and to hell with the real fans?

Are our biggest clubs really global brands?

You certainly notice the presence of Premier League clubs in Kenya (where I’ve just been on a somewhat delayed ‘summer’ holiday).

Curio seller in the middle of nowhere, Kenya. Can any Manchester United fan supply the vintage?

Well, of the predictable few.  Arsenal are, on the basis of an entirely unsystematic and unscientific survey of shirts and baseball caps and a pretty small sample, the clear number one English club of choice for Kenyan fans, followed not so far behind by Manchester United, with Chelsea a poor and third. That was it really. I did see Liverpool mentioned on a sandwich board outside a bookies, but no shirts. In fact the only other shirts were either local Kenyan clubs or Brazil.

The presence manifested itself not only through shirts, but also by slightly crudely painted club crests on cafés, and, in one case, the rather unexpected ‘Gunners Hairdressers’.  Presumably their Boro Primorac isn’t that popular with customers.

Apart from the fact that I found in yet another country only the famous few were present, two things struck me.

First, what did the clubs actually gain from their presence?  I would suspect that those wearing shirts had not contributed to direct sales, and that few Kenyans were avidly using the online club shops.  They certainly weren’t buying tickets for the games.  And how did a baseball cap with ‘Fly Emirates’ as the obvious feature do anything for Arsenal (as we passed, I didn’t even spot an Arsenal logo)?  Again only a suspicion, but I doubt that Arsenal have been leveraging up their price to Emirates on the basis of this particular exposure.  If there was any return, it was for the sponsor but not for the club.

Secondly, the presence of so many hand-painted logos might be seen as some sort of compliment to Arsenal, but the unlicensed use of logos said something about the nature of the clubs’ presence and the weakness of any commercial basis.  It was a kind of artificial presence.  The Arsenal or whichever brand did not have a presence on a par with that of a truly global logo such as Coca Cola.  And that’s probably the point – Coca Cola has an enormous presence in Kenya through their products and the infrastructure to support and develop the sale of their products.  Any unlicensed use of their logos would stamped on by locally-based Coca Cola staff,with the zeal of the IOC spotting that I had mentioned that event which is taking place between 2011 and 2013 in the UK capital by its conventional name.

Because of the lack of product presence, other than, that is, the intangible product presence through broadcasting, it’s hard to justify even the biggest Premier League clubs as global brands in any conventional sense.  The sale of official merchandising at the café (or hairdresser) can only be a dream.  The opening of Manchester United shops in the Far East, for example, is the first steps in becoming a truly global brand, but it is frankly just scratching the surface of an enormous potential market.  To be successful, these clubs will have to produce a radically different marketing mix with new 4Ps (product, price, place and promotion).

Jack Frost and the threat to club finances

Last Saturday’s football programme was considerably more than decimated (1, and then follow the ‘see also’ too), at least to a language purist.  Although the Premier League and Championship programmes were largely maintained, very little football was played lower in the pyramid.  The impact of this financially should not be underestimated.

Even though games will postponed rather than cancelled, clubs can expect a reduction in revenues as most games will be moved from a Saturday fixture to a mid-week fixture.   This leads to a lower level of attendance by non-season ticket holders and corporate hospitality users, and hence a reduction in revenues.

If the bad weather keeps up, we can expect to see more clubs revealing their financial weakness.

More critically for some clubs is the immediate financial hit on cashflow.  Clubs that are living day-to-day financially may well be depending on Saturday’s gate money to settle pressing debts, or at least to keep pressing creditors such as HMRC sweet.  Among the clubs I would rate currently as under financial pressure are Plymouth Argyle (1), Sheffield Wednesday (2), Welling United (3), and Windsor & Eton (4).  Their situations will hopefully resolve themselves, in varying degrees, with the finalisation of takeovers or the further injection of cash by current owners, but the longer this takes the more critical the postponement of games will be.  Any club in a CVA is likely to be on a tight budget too, and hence vulnerable to the volatility of cashflow.

I’ve seen few estimates of how long individual English clubs are likely to suffer (and it’s obviously a function of upcoming weather too), but I did not that Morton, up in Greater Glasgow, is concerned about the possibility of a two-month delay before resuming their published fixtures (5).

If the bad weather keeps up, expect more clubs to reveal their financial fragility.

UPDATE – 13 December

Histon can be added to the list of clubs with serious cashflow problems (A).

Run that past me again?!?

As someone whose heart wanted England to get the 2018 World Cup, but whose head didn’t (in a nutshell, and amongst a number of reasons, we can’t afford it) I naturally had mixed feelings about our failure to win today.  ‘Failure to win’ is of course a massive understatement.  We presumably only attracted one vote from the other 21 FIFA Exco members.

FIFA, not known for its transparency, provides few metrics in its evaluation reports (available here).  They do however give a range of ratings related to risk.  Perhaps we had submitted a bid that was too risky.  Well, have a look for yourself:

	ENGLAND	NETHERLANDS / BELGIUM	SPAIN / PORTUGAL	RUSSIA		QATAR
LEGAL EVALUATION
Government documents
Government guarantees	Low risk	Medium risk	Low risk	Low risk		Low risk
Contractual documents
Hosting agreement	Low risk	Low risk	Low risk	Low risk		Low risk
Host city arrangements	Low risk	Medium risk	Low risk	Low risk		Low risk
Stadium agreements	Low risk	Medium risk	Low risk	Low risk		Low risk
Training city agreements	Low risk	Medium risk	Low risk	Low risk		Medium risk
Confirmation agreements	Low risk	Low risk	Low risk	Low risk		Low risk
Overall
Overall legal risks	Low risk	Medium risk	Low risk	Low risk		Low risk
OPERATIONAL RISK
Competition
Stadium construction	Low risk	Low risk	Low risk	Medium risk		Medium risk
Stadium operations	Medium risk	Medium risk	Medium risk	Medium risk		Medium risk
Team facilities	Low risk	Low risk	Medium risk	Low risk		High risk
Competition-related events	Low risk	Low risk	Low risk	Low risk		Low risk
Transport
Airports and international connections	Low risk	Low risk	Low risk	High risk risk		Medium risk
Ground transport	Low risk	Low risk	Low risk	Medium risk		Medium risk
Host city transport	Low risk	Low risk	Low risk	Low risk		Medium risk
Accommodation
General accommodation	Medium risk	Medium risk	Low risk	Medium risk		Medium risk
TV
International Broadcast Centre	Low risk	Low risk	Low risk	Low risk		Medium risk
NO. OF VOTES
Round 1	2	4	7	9		11
Round 2		2	7	13		10
Round 3						11
Round 4						14

The rating of ‘High risk’ occurs only three times in all the ratings for 2018 and 2022 contenders – twice for Qatar and once for Russia.

It would seem that, far from being risk averse, the FIFA Exco members favoured risky bids!

Of course, I’m falling into that old trap of assuming that they behaved and voted in a rational way.

So, if it wasn’t content that wooed them, perhaps it might have been style.  No metrics here, but my impression was that we had come to the party with just the right blend of banalities and photogenic children that had worked so well in Singapore.  Certainly our effort was no more nor less vomit-inducing than the oppositions’.  Certainly it was no less contrived.

Inevitably we come back to the process of selection as the root cause of England’s failure.  We didn’t jump through the right hoops.  We didn’t pound the ground or press the flesh hard enough.  We trusted Jack Warner.  We were naïve.  The core question is which of those are things we should not be happy with.

As we wake up the next morning, sadly free of the anticipated hangover, criticism continues to focus on the role of our media.  It was Panorama and The Sunday Times wot dunnit.  Whether it was or wasn’t will be endlessly debated, but that misses the point.  Having a free press with a healthy body of investigative journalists who are happy to point out that the emperor has no clothes is something we should celebrate rather than lament surely, even if we don’t like the outcomes.  There is a need to distinguish between the process of selection and the outcomes of that process.

As for the outcomes, there could have been (from all the countries in the world) far worse choices than Russia.  Have a look at this clip of their plans for stadiums.  Mind you, it would hard to find a less appropriate choice than Qatar to be the host of football’s crowning glory.  I’m sure many a fellow academic is already planning their research on the socio-cultural impact of 2022 on Qatar.  I suspect that either fans will stay way (I would recommend Amnesty Internationals’ latest report on Qatar before you book your flights) or Qatar will unleash a lot of unwelcome behaviour in its hotels, which will test their public relations arm to the limits.

As for the media, there are in fact examples of both excellent and diabolical commentary.  Topping my list of excellent commentary at the moment is Declan Hill’s Stumped, Unanswered Questions and an Organization with a Credibility Death-Wish, closely followed by David Conn’s contribution, Jens Sejer Andersen’s contribution, Paul Kelso’s contribution and Ian King’s reflections over at TwoHundredPerCent. Dishonorable mentions must go to the Daily Mail, and to an amazing attack on the ‘eight villains of the piece‘ by the Guardian, although the last of these appears to have been removed from their website.

If there is any criticism to be made of our media, it is that they raised our expectations too high.  The strength of our bid technically may well have encouraged them to do so, but they didn’t seem to have noticed that the decision is made not by a committee of wise and rational men, but rather by a group of malleable football D-listers.  The evidence was there, thanks to journalists like Andrew Jennings, but was perhaps not given the prominence in mainstream media over the years that it deserved.