Tales From The Sharp End: Cardiff City, Tranmere And Plymouth Argyle
I’ve been off-line for most of the last month – my PC is older than my jokes and I can’t afford a replacement on this money. And I was hopeful that, beyond Plymouth, there wouldn’t be much football financial mess to cover. Some hope. There was good news. The fact that West Ham’s losses were only £20.6m seems to be the starting pistol for a good ol’ Cockney knees-up, especially as they’ve been allowed to ride roughshod over Premier League rules to grab their tenancy of the Olympic Stadium. Wolves look like they’re having a ball, with nearly two years of Premier League survival behind them. But it remains to be seen how either club will cope if relegation beckons. And for every Wolves, there’s at least one club available to remind us that football, mostly, remains in a financial mess. Blimey, even Arsenal lost money between June and November.
Take Plymouth, for instance. Administration has seemed pretty inevitable since England’s 2018 World Cup bid went east. The cynics have said, and I have agreed with pace and vigour, that the full horror of the Pilgrims’ situation manifested itself when they ‘had to’ call in Peter Ridsdale for help. But a disturbing number of Argyle fans (‘any’ Argyle fans is a disturbing number in this context) have given Ridsdale credit for what he has done for Plymouth, unpaid, unofficially, in recent months. And many want him to maintain his link with the club, one fan even going as far as to say Ridsdale should “do a Cardiff” for the Pilgrims.
Dear me, where to start. Handily, both Cardiff City and its parent company released their accounts recently, revealing precisely what “doing a Cardiff” actually meant when Ridsdale was there. Ridsdale himself missed out on a prize for irony and self-awareness by complaining that the Pilgrims had borrowed in advance against their season-ticket money for both this and next season. This scenario indeed was “doing a Cardiff”, as Ridsdale himself was best placed to know, having controversially done the same at Cardiff twelve months ago, despite promises that the money would be used for transfer window activities. Cardiff’s accounts revealed £ms of borrowed sums, including £26,992,000 to one Langston Corporation (trans: former Bluebirds owner Sam Hammam). This gave lie to approximately 94 old stories from PR Pete’s PR machine about negotiating down, negotiating away and/or paying off the ‘Langston’ debt.
Among Ridsdale’s claims were that all debts would be off if Cardiff paid Langston £10m by December 31st 2010. Cardiff are now controlled by Malaysian businessmen Dato Chan Tien Ghee and Vincent Tan, the money man (hey, I’m a poet and didn’t… realise). But the accounts list the full Langston debt among its liabilities. And with no word of any subsequent repayments in the ‘post-balance sheet section of those accounts, which were signed off on December 22nd, it doesn’t look as if Sam… sorry… Langston has got the £10m. Hammam is continuing to frighten the Cardiff kids and delight the Swansea ones by offering to take on some sort of director of football role at Cardiff as some sort of debt repayment. The Malaysians, Tan in particular, seem none too enamoured with that idea. And the thought of Hammam directing Cardiff’s football while Ridsdale directs Plymouth’s suggests that the two clubs might soon meet up…in the FA Trophy.
Cardiff spent much of the summer dealing with Ridsdale’s financial legacy, which included unpaid tax, unpaid transfer fees to Sunderland, Charlton Athletic and Motherwell, unfiled accounts to May 2009 (“I knew there was something I’d forgotten,” Ridsdale might have said… but probably didn’t) and total borrowings not unadjacent to (eek) £40m. Hammam, meanwhile, continues to appear in the local press, as if he were in any way a credible solution to Cardiff’s ills, rather than a key source of them. A side issue, compared to any Hammam return anyway, is the origin of £3.5m of Cardiff’s borrowings. The local papers reported last June that the club had borrowed between £2.5m and £3m during the fag end of Ridsdale’s regime, from “a mysterious company registered in the Cayman Islands tax haven.”
Company secretary Alan Whiteley said at the time that the firm, “Player Finance Fund I SPC” had become a secured creditor of the club “in exchange for writing down the amount owed.” He added “the debt has been rescheduled” and noted that it was “a historic debt… part of the club’s previous funding arrangements.” What he neglected to mention was that the money was secured against transfer income and that transfer activity required the “prior written consent of the Player Finance Fund.” The accounts were left to reveal that little gem. And the South Wales Echo reported last summer that “senior figures at the club were not told the money had been borrowed.” Must have slipped Ridsdale’s mind, such was the club’s need for the cash.
The loan is now an issue more for the fact that Coventry City’s owner Ray Ranson runs the hedge fund Sports Assets Capital, from whence the money came in the first place. Ranson claims that “neither I nor Sports Asset Capital have ever lent or given money to Cardiff.” Meanwhile the accounts refer to a “loan and related interest from Sport Asset Capital for £3.5m.” It may be that the missing ‘S’ in the accounts (Sports/Sport) is all important and that Ranson’s doesn’t have an interest in two clubs. One would hope not, given that Coventry could do with £3.5m at the moment (I’ll get to them later in the week). But the borrowings remain as a testament to the consequences of “doing a Cardiff.”
More old relations of this column have turned up on Merseyside – more welcome than anyone called Thomas O or George, but possibly only just. ‘Club 9 Sports’ have emerged as 60% owner of Tranmere Rovers Peter Johnson’s preferred bidder for the 90% of the Merseyside outfit which is currently up for sale. Club 9 were about the 97th potential bidders for Sheffield Wednesday during that protracted ownership saga. They appeared in the Steel City just over 12 months ago with a far-from-winning combination of medium-sized, contingent investment, family-sized psychobabble and management fee charges in bank-bonus territory. Even a Wednesday board that was interested in selling (as that Wednesday board patently wasn’t) would have given Club 9 short shrift. Yet Johnson seems remarkably undisturbed by this, as he is “at a stage where I need some succession, with money” and seems to believe that Club 9 have it.
Fans’ unease at the prospect of any sale is understandable after the wrong-sort-of-headline-grabbing attempts in 2009 by US firm Dornoch Capital Advisors to sell the club on eBay. And that unease has become more specific since a connection was established between Dornoch and Club 9, in the outspoken shape of Joe Kosich. The eBay thing was Kosich’s idea – one which he explained away as an attempt to “create a ‘buzz’ and positive publicity surrounding the capital raise for Tranmere, which had generally been ignored by investors.” The idea made more sense in that context. Johnson had been looking to sell for a while and responses had been limited to bidders such as Portuguese group Best Holdings, who failed to take over Swindon Town in 2007 in much the same inglorious way as… er… Club 9 had failed at Wednesday.
But it was still clumsy and crass in the extreme. Not unlike the lengthy rows Kosich started on Wednesday fans’ website ‘Owlstalk’ over the economic credibility (or otherwise) of Club 9’s Wednesday takeover proposals – rows he saw as part of his “consultancy” role. If that isn’t enough to put off Rovers fans, a more in-depth look at Club 9 might do the trick. Much of their history of sports involvement, none of which involves football, is second-tier, thirty-plus years old and centred on Club 9 “senior adviser” Carl Scheer. Scheer revels in the title of former ‘Executive of the Year.’ Unfortunately, that sounded less impressive when the year was revealed as 1975. Some of the franchises with which he has been involved, such as the Charlotte Bobcats, are teams with which fellow Americans ‘General Sports and Entertainment’ (GSE) were involved. And GSE’s unconvincing record as owners of Derby County since 2008 won’t have encouraged anyone on Birkenhead. Talks were at a heavily-emphasised early stage last month. And little has been heard since. It might be best kept like that, and maybe Club 9 will go away.
But there’s no going away from Plymouth Argyle. For my next job interview, I’m using the “Ridsdale method.” I’ll choose the candidates for the job, choose the people doing the interviewing, have three months access to the details of the job, including exclusive knowledge of the budgetary requirements. And, just to be on the safe side, I’ll get an old mate to make the final appointment. This won’t be possible, of course, as it breaks every relevant employment law in the book… plus one or two that aren’t because the actions are so blatantly unjust. But this is precisely the advantage Ridsdale has, along with any bidder involved with him.
He has had control of the process for so long that no-one has even questioned why the club’s recent court dates have been in Leeds, Ridsdale’s home town. If that wasn’t enough, Plymouth’s “senior” administrator, Brendan Guilfoyle, said two weekends ago, some days before the deadline for potential bidders to come forward, that “I think I have seen the guy who is likely to buy Plymouth Argyle.” And former Argyle executive director Keith Todd complained last week that “it looks like a done deal to be honest, we’re struggling to get a look-in.” This, however, was probably met with smiles all across the city, given Todd’s pivotal role in Plymouth’s financial demise.
But such is Plymouth’s desperation for money that Guilfoyle can show such blatant favouritism. He can declare that the preferred bidder will be “the one that makes the most money available,” without even a cursory nod towards fitness or propriety. And he can be so pro-Ridsdale that you wonder whether he is going to make him “preferred bidder” or announce their engagement. Whether or not Ridsdale is directly involved with the preferred bidder, the process appears, from where I’m typing, to stink. This wouldn’t be so bad if it resulted in finance and competence at Argyle – means to an end, and all that.
But you have to wonder about both when the administrators’ were able to confirm in court that unsecured creditors, including us in the guise of HMRC of course, will get NO pence in the pound, before the final deadline for bids had passed. By the time you read this, Guilfoyle might have finally got round to naming the preferred bidder he probably met ages ago. It won’t be Todd (hooray!). And I’m still hopeful – though possibly against hope – that Ridsdale won’t be anywhere near the process (even Leeds isn’t far enough). One way or the other, though, Plymouth’s problems are far from over.
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