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Posts from the ‘Football Finance’ Category

Apr 4

Messy house

The latest Begbies Traynor report on football’s well-being states that:

“Of 68 teams surveyed in the Divisions [Championship, 1 and 2], 13 have signs of distress such as serious court actions against them, including winding-up petitions, late filing of accounts and “serious” negative balances on their balance sheets. That 19% compares to just 1% in the wider economy”.

When will they learn?  The Firm has been Administrator at several clubs that I’ve personally had involvement with: Chester and Huddersfield.  Plus others such as: Lincoln City, Northwich Victoria, Wrexham, Farnborough, Crawley, Scarborough, Bournemouth, Halifax, Southampton and Port Vale.

From a purely selfish perspective this keeps us in business, but how many times do we need to ask when will football get its own house in order?

The survey measures the financial distress of clubs according to problems including serious court actions against them and big negative balances on their balance sheet.

Mar 9

Stockport County Supporters' Co-operative

Clear Blue Skies Over Edgeley

… But Cloud Over Football

Today heralded Port Vale Football Club entering Administration – a status, all too familiar to fans of Stockport County.  This is the 92nd insolvency in the top five divisions of English football since 1992. The equivalent of the entire top-four divisions of English professional football!

The Football Authorities have also just released their joint response to the recommendations of the Culture Media and Sport Select Committee Inquiry and the Government’s input on improving the regulation and governance of English football. At this stage, Stockport County Supporters’ Co-operative seeks to emphasise that the proposals are not what we were hoping for. Although they have proposed the introduction of a licensing system, in our view, this stage of the reform process only addresses the ‘principle of licensing’ and thus, doesn’t go far enough.

We endorse the opinions of Supporters Direct and its proposals on this matter, including a clear proposal for supporter-engagement through supporters’ trusts. Stockport County Supporters Co-operative is part of a wider movement of organisations, under this umbrella body, established by supporters of football clubs now stretching not just across England, or the UK, but also across Europe. Ashley Simpson, Chair at the Co-operative commented: “If the substantive issues are not addressed, we fully expect the current trend of insolvencies and financial strife affecting football to continue.”

Stockport County Supporters’ Co-operative and Supporters’ Direct welcomes proposals in the football industry that can help supporters’ trusts to increase their influence in club governance and ownership.

This is a press release that I prepared for the Co-operative. The full stance on governance from Supporters Direct is available at: http://clients.squareeye.net/uploads/sd/Licensing_Proposal_A.pdf

Mar 6

1 Comment

Magpies been hoarding

As a sequel to ‘Taxman Cometh’, one Premier Club has been tackled – Newcastle United.

Apparently the Club had set aside an amount to pay but the actual figure yet to be disclosed is predicted to be less than the contingent liability that the Club had calculated and ‘stored’ in previous accounting.

Newcastle United has settled its claim for outstanding tax by the HM Revenue & Customs over the payment of “image rights” to players.

The majority of arrears is understood to relate to the payment of image rights to its players.  It is said, a ‘loop hole’ had been taken advantage of and by classifying these payments as image rights rather than salaries they could be distributed to companies (including offshore). Thus, benefitting from reduced corporation tax (26% rather than higher rate at 50%).

I understand that Chelsea and Newcastle have dealt with HMRC though other premiership clubs are following suit. A HMRC spokesman has quoted that: “The majority of premier league football clubs have now confirmed that they will pay tax arising from image rights payments, and we continue to negotiate with those that are yet to settle.”

Mar 5

FCUM nearly home

FC United of Manchester (“FCUM”) has raised in excess of £1.5M from its community shares issue.  I am delighted to have worked with this Club in the UK (and Turkey).  This experience reflects my commitment to the concept of greater supporters’ involvement and governance being a potential model for ‘clubs’ stewardship’.

The achievement means that only £71K is needed to build the Stadium and ancillary facilities in Moston.  I have no doubt that this will be achieved.  I’ve even had a recent notification of another bid for FCUM being successful.  Indeed, they are asking me to meet in the morning?

The Club has received planning permission from Manchester City Council to build a football ground and community facility in Moston, North Manchester, and is looking to raise £4.6M in total.  This Site after an earlier proposed site at Ten Acre Lane and a ‘spiritual home’ at Newton Heath fell through.

The Appeal illustrates something that I have been excited by for some time as another string (of many!) in running the sport and financing in non-traditional ways.

FCUM’s Andy Walsh, General Manager comments: “Raising over GBP1.5m in the current economic climate has been a Herculean effort and we believe is the largest amount ever raised by supporters independently. With 95% of our share target now achieved, and brilliant progress made on other funds such as our Development Fund, we just need a final push to raise the remaining GBP71,000 by 15 March, which will unlock other grant funding and enable us to start building in Moston”.

The FC United community share scheme has a minimum share purchase of £200 and is open to all investors, whether individuals or organisations. The share issue has been given advance approval by the HMRC Enterprise Investment Scheme and subject to personal circumstances this allows individuals to claim tax relief of up to 30 per cent on the amount that they purchase in the share scheme.

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