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Friday, January 09, 2015

HUST Statement – 100% HUST Ownership

This from HUST:

The following is a statement from the HUST board regarding the issue of 100% HUST ownership:
We considered a 100% HUST-owned club, it was the first thing on the list. Supporters Direct were keen on the plan, it is their ideal aim for every club.
We had a conference call with James Mathie of Supporters Direct and finance expert Nick Igoe, who had both been part of the work to assemble Portsmouth’s ownership package, as far back as early May 2014. At that point we considered the viability of rescuing the existing club and the possibility that the club would have to start again.
We mulled over the debts of the existing club, that had been estimated at the time, and it was reasonably clear that – assuming the estimations of debt were accurate and abiding by the football rules regarding debt repayment – a rescue appeared (on the available evidence) near impossible on the funds available without substantially harming the on-field expenditure over a long period of time – even turning to schemes like Loan Notes and Community Shares were unlikely to see sufficient raised. However this would not have stopped us fully investigating the possibility if we have been granted access to the club accounts.
It was agreed with Supporters Direct that the pledges that had been received in April were never likely to all come in. Darlington 1883 lost nearly 40% of their pledges between a bid for the existing club and turning it into hard cash to form their new one. On the figures we had been pledged that same percentage drop – a figure not uncommon to Supporters Direct’s experiences – would have left us with slightly less than £150,000 to rebuild a club from scratch.
We would have to agree new leases, expect to pay the first quarter’s rent and rates and legal fees associated with agreeing the leases. The old club’s legal bill to agree new leases – for the Council’s expenditure on lawyers let alone the club’s – was £70,000. Yes, it was a lengthy complicated procedure with much detail that wouldn’t possibly be needed in our case – maybe even that the work had been done already – but there would still be a cost.
Then there were the fixtures and fittings. Much of the bar fittings were owned outside of the club, but the essential matchday equipment – like goalposts, physio room equipment, catering hut equipment etc – would now be in the hands of the Official Receiver. Also, too, gym equipment and other kit – stewards jackets, radios, office furniture and equipment etc. Chester’s Council appears to have paid around £30,000 to secure equipment at their stadium, and they didn’t appear to have a gym.
Between securing the stadium and the assets, we would have moved on to the kit for next season – the playing kit, tracksuits, equipment, club shop merchandise etc. If it wasn’t nailed down (and in some cases even if it were) in the stadium it would probably have to be bought either from the Official Receiver or from a trade supplier. Plus insurance costs, applications to join leagues, and a reserve fund to keep trading in the black given that few banks were keen on lending money to football clubs.
It was understood that lot would have swallowed up our predicted warchest. Then there was the cost to get the ground up to scratch.
We are all aware of the state of the Edgar Street stadium. It had received minimal attention for much of the 15 years of Graham Turner, and the past 2-3 years had also seen investment at a minimum as finances became scarce. Nearly 20 years of neglect had taken it’s toll, and we were aware that substantial investment into the ground was needed to avoid regular costly maintenance. With £150,000 to start a side, we would have had a plan. Needing the same again to do the stadium? We were in trouble if we went on alone. Darlington had to put their begging bowl back round midway through their first season, getting another £55,000 to stave off disaster. We couldn’t realistically commit HUST to such danger.
We also considered the strength of the HUST Board, its business experience and ability to commit time to a project that would need substantial man hours committed to it. Not just in the creation but also the day to day running. We spoke to a large number of people regarding this time commitment, few were able to offer it and fewer were willing to do it much beyond the short term.
We also considered HUST’s own elections. At the first in November 2013 just six people stood for the nine posts, the following September it was just seven though we bolstered both times through co-opting anyone that stepped forward. We couldn’t find enough people willing to fill a (barring the odd crisis) fairly undemanding committee seat – how on earth were we going to run a club board (with all the added time demands and responsibilities) in addition to the Trust board?
We agreed that the Jon Hale proposal should go public in June to create debate and to stimulate interest in the phoenix scenario. Despite the need for a phoenix club being almost inevitable, few wanted to seriously consider the prospect until the club finally died on December 19th – six months after the Jon Hale proposal had been first aired.
We had no significant funding and few volunteers at board level (although there were plenty of offers of help with the stadium and matchdays) to get stuck in at the deep end of a 100% HUST-owned bid. The Board of HUST therefore decided, after several months of research and deliberation, that the option of 100% HUST ownership was not viable under the known conditions as stated.