Yet More Uncertainty For Bradford City

By on Apr 17, 2011 in English League Football, Finance, Latest | 1 comment

Ten years ago, Bradford City were a Premier League Club. Since then, they have dropped to League Two, had two spells in administration, and it still doesn’t look as if their future is getting any brighter. Jason MacKeown reports on their latest woes.

Following a decade of regular failure, Bradford City supporters have become used to seeing pre-season expectations shattered by this point of the year. But even judged on such low standards, this season’s misery on and off the pitch seems like a new level of under-achievement. Bradford began this campaign – as laughable as it seems now – the pre-season favourites to win promotion from League Two. Yet with five games to go the only possibility of departing this division is a lingering threat of relegation to non-league. Four defeats from five games – the last two ending 0-3 and 0-4 – leaves them with some work to do to confirm their survival. Even if the Bantams do get enough points to scramble over the finishing line, the prospect of a fifth consecutive season in League Two is hardly one to excite a club widely considered too big to remain in England’s bottom tier.

And it appears that things really can’t go on like this.

Over the last fortnight, the Bradford City Board has revealed it is in talks with the two companies who own Valley Parade, and the adjoining offices, over the possibility of reducing the rental terms they are forced to meet. The success of these negotiations, partially triggered by a late rent payment following a short-term cashflow problem, could have significant consequences for the Bantams. Joint-Chairman Mark Lawn claims that, without a reduction, the club will be forced to quit Valley Parade – their most likely destination a ground share with their Rugby League neighbours, Bradford Bulls – within a year. Lawn also issued the bleakest of warnings: continue muddling in League Two at Valley Parade, with the present rental agreements, and there will be no Bradford City Football Club in two years time.

How did it get to this? Like so much of Bradford’s modern day decline, it can be traced back to the infamous ‘six weeks of madness’ in 2000. That was when – with City a Premier League club – then-owner Geoffrey Richmond embarked on a spending spree that barely two years later would see the Bantams almost collapse under a £36 million debt. While a £40,000 per week Benito Carbone was paraded to an astonished media during those six weeks, Valley Parade’s main stand was being rebuilt behind him in a move that increased the stadium capacity beyond a level it has subsequently ever being needed for; leaving a crippling £7.5 million 25-year mortgage, through Lombards, to pay off.

Gordon Gibb now owns the deeds to Valley Parade. He once jointly owned the football club too. When in 2002 Bradford – now in Division One/Championship – went into administration on account of their debts, Gibb invested into the club as Richmond exited. Just 26 at the time, Gibb had continued his late father’s theme park business which most notably includes the Ripon-based Flamingo Land. Despite his financial input, the hangover of administration still threatened City’s ongoing existence. So in 2003 – in an effort to get one of the largest creditors, Lombards, off the club’s back – Gibb used his family’s pension fund to buy Valley Parade for £2.5 million. The adjoining offices, shop and car park were sold to investment company Development Securities for a similar amount. The proceeds of the £5 million raised were used to re-negotiate the mortgage with Lombards, which would now be paid off over 10 years. City would pay Gibb and Development Securities annual rent (approximately £350k to each company) as part of a 25-year agreement.

At the time this deal was presented as great news that would go a long way towards securing the club’s future. And while selling Bradford’s home was unsettling for supporters, the fact it was to the joint owner, Gibb, alleviated some of those fears. In a statement at the time, the club said: “The directors felt this was the best option available to the club in the long term. The aim is for the properties to return to the club’s ownership at the earliest opportunity when the financial strength allows…With the final piece of the jigsaw in place we can concentrate on building a Bradford City for the future rather than concerning ourselves with its pure survival.”

Eight years on, this arrangement has become a millstone around the club’s neck. It all unravelled very quickly. A month after selling the ground to Gibb, League One-bound Bradford called in an accountant to look at the books – only to be issued with a dire warning. The club barely had enough money to see out that season, and a further injection of funding was needed. The Rhodes family – who co-owned the club with Gibb and had also been joint owners with Richmond – agreed to invest more money, but in doing so asked Gibb to sign over some of his shares to them in return. Deeply upset, Gibb walked out on the club. Two months later it was back in administration.

The relationship between Gibb and the Rhodeses has remained broken since. After voting against a vital Creditors Voluntary Agreement proposal – which only went through after under-achieving former striker Ashley Ward settled for less than his was still owed from an £18,000 a week contract – Gibb cut all ties with the club apart from retaining ownership of the ground. In 2007 Bradford were relegated to League Two and a new investor – Mark Lawn – joined up with the Rhodes family; son Julian running the club alongside Lawn. Having being cash-strapped for so long, City suddenly had the resources to tackle what had become cripplingly large rent payments and attempted to buy the ground back from Gibb. Despite the emerging credit crunch that would see the property market almost collapse, Gibb’s quoted asking price was over double the £2.5 million he had originally paid for the ground. Way more than Lawn and City could afford. Gibb had previously described Valley Parade as a “worthless asset”.

By now the rent and running costs of the stadium had reached £1.3 million per year. To put that into perspective, Notts County – whose Meadow Lane home is owned by the council – pay just £20k annually. Torquay United – who thrashed Bradford 3-0 last weekend and occupy a play off spot the Bantams expected as a minimum this season – pay their council a minimal rent to use their Plainmoor ground. In 2009 Bradford appealed to their local council for support, but they were only interested in a vain and flawed proposal to spend £75 million doing up Bradford Bulls’ Odsal stadium; and encouraged the Bantams to move in. The redevelopment scheme, which partly relied on securing private investment, has since been quietly dropped. The alternative option of buying Valley Parade at a fraction of that £75 million cost – and moving the Bulls in – has been resisted by both the council and Bulls, for reasons never explained.

For Bradford City, the consequences of this season’s failure will include a vastly reduced playing budget for next year, which may already rule out their promotion chances. Lawn and Julian Rhodes have loaned the club further money in recent years, mainly to give their managers large budgets – as high as £1.9 million one season – but Bradford have failed to even make the play offs in four years. Attendances, which are boosted in numbers by the club offering by far the cheapest season tickets in the top four divisions, are beginning to decline. Lawn and Rhodes state they have no new money to invest, so the future looks difficult.

Which is why they have attempted to open talks with Gibb and Prupim – the latter of whom officially owns the Valley Parade offices and car parks – about a rent reduction. The proposal on the table is a structured deal which would see Bradford make smaller payments while they are in League Two, and then rise by whichever division they are in. They have even proposed rent terms for the seemingly improbable scenario of returning to the Premier League – and, in the top two divisions at least; the amount of rent the two owners would receive is higher than they earn under the current deal.

The attraction for the club is obvious. At this level the £1.3 million annual overheads are significantly high; but if they can reduce it now and climb back up the leagues turnover would increase, making the increased rent more manageable. Lawn stated in January: “In the Championship we survive and we survive well. That’s where we need to be. The overheads suddenly don’t become as bad because we need this type of stadium to survive.”

So the key lies in persuading Gibb and Prupim that their longer-term interests would be better aligned with City’s goals of rising back up the Football League. So far, the talks don’t appear to be going well. Prupim is at least willing to listen and consider, but Gibb’s pension fund has apparently told the club to talk through its solicitors and then complained to the local press: “There has been no direct contact” (from City). The ongoing feud between Gibb and the Rhodes family makes it a very delicate matter, though it’s worth emphasising that Gibb’s sole responsibility is to act in the best interests of the family pension fund and the people it serves.

Lawn has been blunt about the consequences of the talks failing – the club will have to quit Valley Parade. Yet this threat is not so simple, as the 25-year lease they are bound to would incur a sizeable financial penalty if they were to break it by leaving. While this figure is not public knowledge, the club has hinted they could be forced to go into administration if they were to break the lease – a scenario that throws up all sorts of ethical considerations, beyond these three parties, and could lead to the club’s future again being in doubt.

The council and the Bulls are, unsurprisingly, keen to welcome City to Odsal. Whether either would be willing to financially help the Bantams break the 25 year lease, however, is debatable in these times of austerity. If the carrot of the potential for more rent in the longer-term isn’t attractive to Gibb, the stick of a threat to move out may be enough to force him into negotiating. Valley Parade is situated in one of the poorer parts of Bradford and, indeed, the country. Gibb currently receives an approximate 15% annual return on his Valley Parade investment, but the stadium would be almost worthless and land difficult to sell for a profit if the football club was to move out.

In a sign of how desperate it’s become for Bradford, many supporters are backing the potential move to Odsal and talking up the facilities – widely considered unsuitable for football and, in fact, so run-down the Rugby authorities have threatened to withdraw the Bulls’ Super League licence. When in 2009 the idea of City moving to a redeveloped Odsal was first mooted, fan opposition was fierce. It’s natural that most football supporters would resist giving up their stadium, but Bradford fans more than others have huge emotional ties to Valley Parade following the fire disaster in 1985 that cost the lives of 56 supporters. Indeed while the ground was being rebuilt in the subsequent years, City played home games at Odsal and the experience was almost universally detested.

Yet this further season of huge disappointment – supporters of 40+ years describe this team as the worst they’ve ever seen and, during the Friday night thrashing to Southend, fans chanted: “We love the club, hate the team” – has ignited a belief that Bradford cannot put the past decade of failure behind them and move forwards until the rent situation is resolved. A poll started on a message board rather subjectively put it: “Stay at VP, nice ground which we can’t afford so our team suffer, or; move to Odsal, rubbish ground but lower rent so our team benefit.”

Another way of seeing it – which might be more the view Gibb shares – is that the club simply has to become better at cutting its cloth. If it can’t afford to have large playing budgets each season, tough luck; if loyal fans paying cheap season tickets isn’t bringing in enough revenue, put the prices up. For all Lawn’s claims the club wouldn’t exist in two years time under the current status quo, there remains a suspicion that this is a slight over-exaggeration aimed at putting pressure on Gibb and Prupim to relent.

Bradford was in a desperate position when the ground was sold to Gibb, and for many fans – not to mention the Board – there remains a begrudging frustration that he is allowed to make a 15% profit per year on something that ethically shouldn’t belong to him. But whatever happens over the next few weeks and months, it’s to be hoped the longer-term picture is fully considered. For sure City could move to Osdal, go through some financial pain and emerge it celebrating a promotion or two in their neighbour’s pad. But is the possibility of some success over the next few years really worth giving up the club’s home of 108 years for? Or perhaps that decision was made when the ground and the club were separated eight years ago, and the current Board are trying to manage a business which – were it not in football – would have been wound up a long time ago as unviable.

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Following a decade of regular failure, Bradford City supporters have become used to seeing pre-season expectations shattered by this point of the year. But even judged on such low standards, this season’s misery on and off the pitch seems like a new level of under-achievement.

Bradford began this campaign – as laughable as it seems now – the pre-season favourites to win promotion from League Two. Yet with five games to go the only possibility of departing this division is a lingering threat of relegation to non-league. Four defeats from five games – the last two ending 0-3 and 0-4 – leaves them with some work to do to confirm their survival. Even if the Bantams do get enough points to scramble over the finishing line, the prospect of a fifth consecutive season in League Two is hardly one to excite a club widely considered too big to remain in England’s bottom tier.

And it appears it really can’t go on like this.

Over the last fortnight, the Bradford City Board has revealed it is in talks with the two companies who own Valley Parade, and the adjoining offices, over the possibility of reducing the rental terms they are forced to meet. The success of these negotiations, partially triggered by a late rent payment following a short-term cashflow problem, could have significant consequences for the Bantams. Joint-Chairman Mark Lawn claims that, without a reduction, the club will be forced to quit Valley Parade – their most likely destination a ground share with their Rugby League neighbours, Bradford Bulls – within a year. Lawn also issued the bleakest of warnings: continue muddling in League Two at Valley Parade, with the present rental agreements, and there will be no Bradford City Football Club in two years time.

How did it get to this? Like so much of Bradford’s modern day decline, it can be traced back to the infamous ‘six weeks of madness’ in 2000. That was when – with City a Premier League club – then-owner Geoffrey Richmond embarked on a spending spree that barely two years later would see the Bantams almost collapse under a £36 million debt. While a £40,000 per week Benito Carbone was paraded to an astonished media during those six weeks, Valley Parade’s main stand was being rebuilt behind him in a move that increased the stadium capacity beyond a level it has subsequently ever being needed for; leaving a crippling £7.5 million 25-year mortgage, through Lombards, to pay off.

Gordon Gibb now owns the deeds to Valley Parade. He once jointly owned the football club too. When in 2002 Bradford – now in Division One/Championship – went into administration on account of their debts, Gibb invested into the club as Richmond exited. Just 26 at the time, Gibb had continued his late father’s theme park business which most notably includes the Ripon-based Flamingo Land. Despite his financial input, the hangover of administration still threatened City’s ongoing existence. So in 2003 – in an effort to get one of the largest creditors, Lombards, off the club’s back – Gibb used his family’s pension fund to buy Valley Parade for £2.5 million. The adjoining offices, shop and car park were sold to investment company Development Securities for a similar amount. The proceeds of the £5 million raised were used to re-negotiate the mortgage with Lombards, which would now be paid off over 10 years. City would pay Gibb and Development Securities annual rent (approximately £350k to each company) as part of a 25-year agreement.

At the time this deal was presented as great news that would go a long way towards securing the club’s future. And while selling Bradford’s home was unsettling for supporters, the fact it was to the joint owner, Gibb, alleviated some of those fears. In a statement at the time, the club said: “The directors felt this was the best option available to the club in the long term. The aim is for the properties to return to the club’s ownership at the earliest opportunity when the financial strength allows…With the final piece of the jigsaw in place we can concentrate on building a Bradford City for the future rather than concerning ourselves with its pure survival.”

Eight years on, this arrangement has become a millstone around the club’s neck.

It all unravelled very quickly. A month after selling the ground to Gibb, League One-bound Bradford called in an accountant to look at the books – only to be issued with a dire warning. The club barely had enough money to see out that season, and a further injection of funding was needed. The Rhodes family – who co-owned the club with Gibb and had also been joint owners with Richmond – agreed to invest more money, but in doing so asked Gibb to sign over some of his shares to them in return. Deeply upset, Gibb walked out on the club. Two months later it was back in administration.

The relationship between Gibb and the Rhodeses has remained broken since. After voting against a vital Creditors Voluntary Agreement proposal – which only went through after under-achieving former striker Ashley Ward settled for less than his was still owed from an £18,000 a week contract – Gibb cut all ties with the club apart from retaining ownership of the ground. In 2007 Bradford were relegated to League Two and a new investor – Mark Lawn – joined up with the Rhodes family; son Julian running the club alongside Lawn. Having being cash-strapped for so long, City suddenly had the resources to tackle what had become cripplingly large rent payments and attempted to buy the ground back from Gibb. Despite the emerging credit crunch that would see the property market almost collapse, Gibb’s quoted asking price was over double the £2.5 million he had originally paid for the ground. Way more than Lawn and City could afford. Gibb had previously described Valley Parade as a “worthless asset”.

By now the rent and running costs of the stadium had reached £1.3 million per year. To put that into perspective, Notts County – whose Meadow Lane home is owned by the council – pay just £20k annually. Torquay United – who thrashed Bradford 3-0 last weekend and occupy a play off spot the Bantams expected as a minimum this season – pay their council a minimal rent to use their Plainmoor ground. In 2009 Bradford appealed to their local council for support, but they were only interested in a vain and flawed proposal to spend £75 million doing up Bradford Bulls’ Odsal stadium; and encouraged the Bantams to move in. The redevelopment scheme, which partly relied on securing private investment, has since been quietly dropped. The alternative option of buying Valley Parade at a fraction of that £75 million cost – and moving the Bulls in – has been resisted by both the council and Bulls, for reasons never explained.

For Bradford City, the consequences of this season’s failure will include a vastly reduced playing budget for next year, which may already rule out their promotion chances. Lawn and Julian Rhodes have loaned the club further money in recent years, mainly to give their managers large budgets – as high as £1.9 million one season – but Bradford have failed to even make the play offs in four years. Attendances, which are boosted in numbers by the club offering by far the cheapest season tickets in the top four divisions, are beginning to decline. Lawn and Rhodes state they have no new money to invest, so the future looks difficult.

Which is why they have attempted to open talks with Gibb and Prupim – the latter of whom officially owns the Valley Parade offices and car parks – about a rent reduction. The proposal on the table is a structured deal which would see Bradford make smaller payments while they are in League Two, and then rise by whichever division they are in. They have even proposed rent terms for the seemingly improbable scenario of returning to the Premier League – and, in the top two divisions at least; the amount of rent the two owners would receive is higher than they earn under the current deal.

The attraction for the club is obvious. At this level the £1.3 million annual overheads are significantly high; but if they can reduce it now and climb back up the leagues turnover would increase, making the increased rent more manageable. Lawn stated in January: “In the Championship we survive and we survive well. That’s where we need to be. The overheads suddenly don’t become as bad because we need this type of stadium to survive.”

So the key lies in persuading Gibb and Prupim that their longer-term interests would be better aligned with City’s goals of rising back up the Football League. So far, the talks don’t appear to be going well. Prupim is at least willing to listen and consider, but Gibb’s pension fund has apparently told the club to talk through its solicitors and then complained to the local press: “There has been no direct contact” (from City). The ongoing feud between Gibb and the Rhodes family makes it a very delicate matter, though it’s worth emphasising that Gibb’s sole responsibility is to act in the best interests of the family pension fund and the people it serves.

Lawn has been blunt about the consequences of the talks failing – the club will have to quit Valley Parade. Yet this threat is not so simple, as the 25-year lease they are bound to would incur a sizeable financial penalty if they were to break it by leaving. While this figure is not public knowledge, the club has hinted they could be forced to go into administration if they were to break the lease – a scenario that throws up all sorts of ethical considerations, beyond these three parties, and could lead to the club’s future again being in doubt.

The council and the Bulls are, unsurprisingly, keen to welcome City to Odsal. Whether either would be willing to financially help the Bantams break the 25 year lease, however, is debatable in these times of austerity. If the carrot of the potential for more rent in the longer-term isn’t attractive to Gibb, the stick of a threat to move out may be enough to force him into negotiating. Valley Parade is situated in one of the poorer parts of Bradford and, indeed, the country. Gibb currently receives an approximate 15% annual return on his Valley Parade investment, but the stadium would be almost worthless and land difficult to sell for a profit if the football club was to move out.

In a sign of how desperate it’s become for Bradford, many supporters are backing the potential move to Odsal and talking up the facilities – widely considered unsuitable for football and, in fact, so run-down the Rugby authorities have threatened to withdraw the Bulls’ Super League licence. When in 2009 the idea of City moving to a redeveloped Odsal was first mooted, fan opposition was fierce. It’s natural that most football supporters would resist giving up their stadium, but Bradford fans more than others have huge emotional ties to Valley Parade following the fire disaster in 1985 that cost the lives of 56 supporters. Indeed while the ground was being rebuilt in the subsequent years, City played home games at Odsal and the experience was almost universally detested.

Yet this further season of huge disappointment – supporters of 40+ years describe this team as the worst they’ve ever seen and, during the Friday night thrashing to Southend, fans chanted: “We love the club, hate the team” – has ignited a belief that Bradford cannot put the past decade of failure behind them and move forwards until the rent situation is resolved. A poll started on a message board rather subjectively put it: “Stay at VP, nice ground which we can’t afford so our team suffer, or; move to Odsal, rubbish ground but lower rent so our team benefit.”

Another way of seeing it – which might be more the view Gibb shares – is that the club simply has to become better at cutting its cloth. If it can’t afford to have large playing budgets each season, tough luck; if loyal fans paying cheap season tickets isn’t bringing in enough revenue, put the prices up. For all Lawn’s claims the club wouldn’t exist in two years time under the current status quo, there remains a suspicion that this is a slight over-exaggeration aimed at putting pressure on Gibb and Prupim to relent.

Bradford was in a desperate position when the ground was sold to Gibb, and for many fans – not to mention the Board – there remains a begrudging frustration that he is allowed to make a 15% profit per year on something that ethically shouldn’t belong to him. But whatever happens over the next few weeks and months, it’s to be hoped the longer-term picture is fully considered. For sure City could move to Osdal, go through some financial pain and emerge it celebrating a promotion or two in their neighbour’s pad. But is the possibility of some success over the next few years really worth giving up the club’s home of 108 years for?

Or perhaps that decision was made when the ground and the club were separated eight years ago, and the current Board are trying to manage a business which – were it not in football – would have been wound up a long time ago as unviable.

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    1 Comment

  1. Sorry to be such a pedant, but Flamingo Land is nowhere near Ripon – it is at Kirby Misperton, halfway between Malton and Pickering on the North York Moors.

    Simon Cope

    April 18, 2011

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