Update on clubs in crisis. Tom Davies reports
The takeover of Rotherham by a group of local businessmen has saved United from the immediate threat of liquidation that has hung over them since the turn of the year, but the club’s financial position remains precarious and fundraising campaigns are continuing.
A consortium headed by businessman Dennis Coleman and restaurant owner Dino Maccio took control in late March, averting the imminent threat of bankruptcy, but details of how much cash has been invested are unclear, as is the future relationship between club and supporters, who contributed enormously to recent fund-raising efforts and hold a 26 per cent stake in the club through the Rotherham United Supporters Trust (RUST).
The outlook had been dire since a letter to shareholders in February warned that Rotherham would cease trading within weeks if funds were not found to plug pressing debts, principally to the Inland Revenue. The club had only been taken over last year by the Rotherham 05 consortium after earlier financial problems (see WSC 215). The previous long-term owner, Ken Booth, had relinquished control in January 2005 for £1, but, in exchange for clearing the £3 million overdraft, Booth took control of Millmoor and loaned £660,000 to cover losses until last summer. The repayments have added to the club’s burden, one familiar to some other sides, of players on Championship contracts now playing in the nether regions of League One and below. Relegation to League Two this season could have particularly harsh consequences.
Their predicament has been compounded by a dispute over Southend’s failure to pay £120,000 for Jamal Campbell-Ryce, which Rotherham claim was owed as part of a “pre-contract” deal signed last summer. An FA hearing to settle the issue is due later this month.
Fans have been raising cash through the Save The Millers campaign, initiated by the club and RUST, and the process continues even now the takeover is complete, as money is still needed to pay the tax authorities by the end of May. Some fear that recent developments are merely postponing the club’s structural problems rather than ending them.
Frayed relations at Mansfield, where fans are still waiting for chairman Keith Haslam to fulfil a promise to restructure and then hand over control of Town, and to pay back all the loans he has taken out of the club, which sparked recent town-centre demonstrations. Though Haslam has paid back all personal loans, an outstanding loan of £580,000 made to his holding company, Stags Limited, remains, a loan that Haslam says was to buy land for a football academy that has been granted planning permission but not yet been built.
Haslam offered supporters’ trust Team Mansfield an opportunity to bid for the club, but the trust decided not to, complaining that Haslam’s failure to make available sufficient financial information is stymieing any chance of a feasible bid. In February, for example, he turned down a request for a day of due diligence examining the books.
Fans accuse Haslam of overvaluing the club, at around £5m; the trust’s financial advisors say it is worth around half that at best. There has been no movement, either, on an offer of around £3m from club shirt sponsor Andy Perry. Haslam’s pledges to restructure the club have also come to nothing so far, despite the chairman promising in September last year, and again three months later, that an overhaul would be carried out. The FA are monitoring the situation and may yet have their regulatory abilities tested should the delays continue.
The fact that Mansfield are, by and large, a sustainable, debt-free club has only added to the frustrations of supporters, who blame Haslam for not building on their potential to succeed. “The club’s finances have improved since Haslam came 12 years ago,” admitted Team Mansfield spokesman Chris Vasper, “but he’s had a lot of windfalls – from land sales to a property developer to the sale of Liam Lawrence – and we have not progressed. It just seems like he’s in it for what he can get out of it, and he just will not invest.”
Further down the pyramid, Ryman Premier League club Hendon need to raise £25,000 by June 30. The Arbiter Group, which has propped them up in recent years, is ending its financial support. Failure to raise the funds could spell the end of the club, who will also be looking for a groundshare as their existing Claremont Road ground was sold to property developer Kings Oak, part of housebuilders Barratt, by Barnet Council last year. The same local authority has also been embroiled in a dispute with Barnet FC over their search for a new ground (see WSC 226).
From WSC 231 May 2006. What was happening this month