Tom Davies looks at three more clubs in crisis
One of the genuinely encouraging success stories of recent seasons has been Stockport County, rescued by a fans’ takeover three years ago, promoted via the League Two play-offs last year and well placed in League One until a recent slump. However, the realities of running a club to budget could yet overwhelm County, with lingering debts threatening to push the club into administration before the end of the season and a familiar search for investment becoming the priority.
Stockport’s most pressing debt is around £250,000 to Her Majesty’s Revenue and Customs, with whom negotiations on a repayment schedule are ongoing, and with the club losing around £300,000-a-year (by no means uncommon at this level), finding the cash is no easy task. Part of the problem is that supporters trust-run County’s lack of assets and access to sources of investment make borrowing a problem. Stockport do not own their ground; Edgeley Park remains in the hands of former chairman Brian Kennedy’s Cheshire Sports Promotions (CSP), who still control co-tenants Sale Sharks. County pay only a nominal £1-a-year rent, but CSP’s control of ticketing administration gives them a slice of gate receipts, while a clause in the trust’s takeover gave County a ten-year option to buy the ground (not feasible at present) or CSP entitlement to 30 per cent of each net transfer fee, to pay back Kennedy’s company.
All of which means the trust, while keen to maintain democratic fan control, is willing to talk to investors. Two possible interested parties include former managing director Mark Maguire, who has been in talks with a consortium of venture capitalists, and a group headed by former chairman Brendan Elwood (under whom the club built up large debts on players from which County are still reeling) and Lord Snape, recently in the headlines over his remarks about parliamentary lobbying access. While Stockport’s problems may appear to flag up the limitations of fan ownership, they also highlight the unsustainable debt-fuelled nature of conventional management that makes it so difficult to compete.
Cheltenham Town have turned to their local council to help them out of their financial pickle, which has left them entangled in the area’s party politics. The club have applied for a £100,000 loan to tide them over after a £200,000 shortfall developed in finances that led to the offloading of several players. However, a decision on the loan has now been deferred to the borough council’s chief executive after a full council meeting on March 30 was unable to reach a decision due to six of the authority’s seven Liberal Democrat councillors declaring an interest (Town chairman Paul Baker is a former Lib Dem councilor).
A combination of overspending on loan signings and a recession-fuelled slump in commercial income has left Cheltenham on their uppers. The cancellation of a temporary groundshare with Bristol Rovers at the start of the season also hit Cheltenham’s budget.
So now the club have turned to local government, applying for a ten-year loan from the council’s reserves, to be repaid at commercial rates, which might at least assuage some local complaints about “football on the rates”, but imposing another repayment burden on the club. The political stalemate means borough chief executive Andrew North is now expected to convene a working group to discuss the loan before a final decision is made.
A more unusual form of civic partnership is set to preserve Stranraer’s immediate future after a local housing association, Loreburn, agreed to take over the running of the Scottish Division Two club, whose £250,000 debt levels had threatened to finish them off. Stranraer would become a subsidiary of Loreburn with their debts met through a “soft loan” from the parent company.
The ill-starred history of relationships between football clubs and property organisations caused some initial scepticism but James McQuistin, of the Save Stranraer pressure group, feels those doubts have been dispelled: “I was a bit cynical at the beginning because of the property and housing aspects. We don’t own Stair Park [the club’s council-owned ground] and we have only got the social club, but Loreburn are also a charity and they are very strictly monitored.”
Club members voted early last month in favour of the plans, which are due to be finalised in the middle of May subject to agreement by the football authorities and housing regulators. The fact that the deal offers management and legal expertise that, says McQuistin, had been sorely lacking in recent times might also have helped attract members’ support. “We’re basically stepping in to help them do a job that the banks should have been doing. The club’s basically a sound business,” Loreburn chief executive Ahsan Khan told WSC. “It would have been a major dereliction of our duty had we failed to offer to help another major community business.”
From WSC 267 May 2009