The Further Adventures Of Stockport County

By on Jul 9, 2011 in Finance, Latest, Non-League | 8 comments

Stockport County director Lord Peter Snape declared in March 2009, one month before the club entered administration, that he wanted “Stockport County Trust to vote to relinquish ownership of the club,” because if it “had been run properly we wouldn’t be in this mess.” Snape now knows it wasn’t as easy as it looked; and the consequences of ‘his’ consortium’s “mess” are currently unclear. Last close season, Snape was part of the optimistically-entitled ’2015 consortium’ that bought County out of fourteen-months in administration which redefined the boundaries of the description ‘fraught.’ Twelve fraught months of ’2015′ saw County spectacularly relegated for the second consecutive season and the buck ready to be passed to another consortium faced with the same old, unsolved problems. This, as yet un-named, consortium, has avoided the tag ‘mystery’ as its leader, disturbingly-young Liverpool businessman Tony Evans, has already joined the club’s board after making a reportedly “significant investment”.

The significance of the investment has given 27-year-old Evans the chair for, slightly bizarrely, “the next six weeks” while his consortium colleagues undertake due diligence and decide whether to take the “option of a controlling interest in the longer-term.” And for the first time in ages, County are bidding ‘significant’ money for players. But this takeover is no fait accompli. With an almost depressing inevitability, Evans’ business background is somewhat chequered. One recent venture, the modestly-entitled insurance brokerage Anthony Donald Evans Limited (ADE), went into administration last November with debts of £1.2m. People who have worked with/for Evans have contrasting views about him. And there is dispute as to the culpability for the debt, with claims that ADE itself was owed far more than £1.2m. But ADE’s administrators were moved to comment on the firm’s “aggressive policy of writing insurance business at a low cost,” and numerous customer complaints. And “New York-based hedge fund manager” Mike Newton reached a similar stage as recently as March, only to take fright and flight having seen County’s books. But revelations last month exposed the true nature of current takeover negotiations.

County’s modern problems date back to the club’s 2003 sale to by then-owner Brendan Elwood to ‘Cheshire Sports,’ run by Brian Kennedy, who gave off the aura of building a Cheshire “sports family” – he already owned Premiership rugby union side Sale Sharks, who moved into County’s Edgeley Park ground. The deal was, shall we say, a better one for the Sharks than for County, who, to stretch the family analogy, were treated by Kennedy as almost the runt of the litter. Kennedy “did a deal” with County’s Supporters Trust, who took over the club in 2005 in a blaze of idealistic glory, only to be sunk by legacy debt and a groundshare arrangement described in May 2009 by Elwood as “suicidal.” Amid the problems, manager Jim Gannon led the team to League Two promotion play-off success in May 2008. But within eleven months, County were in administration after the familiar list of tax-based winding-up orders and struggles with loan repayments.

A year of impenetrable faffing around followed as a consortium led by ex-Manchester City striker Jim Melrose repeatedly failed to satisfy Football League concerns over the consortium’s business plan in the light of the Edgeley Park lease agreement offered by Kennedy, including “whether priority is given to rugby or football fixtures”. And in the wake of County’s inevitable relegation last spring, the 2015 group emerged as club “saviours.” They too had struggles at what should have been the i-dotting and t-crossing stage and it was only after two months of delays caused by “serious and complicated issues surrounding the administration process” that they were able to take ownership, paying £250,000 to take County out of administration.

The ‘new’ board consisted of many old faces, including Snape, former Chief Executive Sean Connolly and the wife-and-husband pairing (in that order), Mary and Tony Gibbons. Chair was Alwin Thompson, former boss of… cake-makers Interlink Food. Mary Gibbons became vice-chair. Thompson’s press statement confirming the takeover could easily have been from a Trust, with its emphasis on community and communication. But even before his eve-of-season rallying cry to supporters (“get behind the revolution”) problems had emerged, not least over the hiring of a manager.  The consortium clearly saw Gannon, made ‘redundant’ before administration, as part of the club’s future. But, for reasons at least partly beyond their influence, they were unable to appoint him. And eventual appointment Paul Simpson had the feeling of second or third choice almost from the start with rumours abounding about board divisions on the issue.

Simpson was quick to “express his disappointment” after an early-season 4-0 loss to Shrewsbury which resembled the beatings County had taken in their relegation season, which fans hoped had been left behind. Simpson laid into the club’s administrators, Leonard Curtis, for “burdening us with high-earners.” And he donned his sarcasm hat to add: “I suppose we should thank him really, he’s left us high and dry with contracts to honour on big wages. We’ve got no money.” Aside from assuming Leonard Curtis was a bloke, he was right. In early September, CE Connolly resigned, after rumours of his departure had spread since Simpson’s appointment. And by January both Thompson and Simpson had gone, leading to yet more faffing around about a managerial replacement. Gannon was again in the consortium’s sights. But again, they failed to get their man, who avoided County’s frying pan to step into Port Vale’s fire.

However, the major problem was still the crucifying lease agreement. In April 2010, I wrote on this site that “all” the 2015 consortium needed was “to thrash out an agreement with the still ever-helpful Kennedy and the club will be saved (episode 94).” My cynicism was not misplaced, as County’s annual rent was revealed to be £135,000 and rising very fast indeed (to nearly a quarter of a million pounds within two years). In 2009 Snape had been critical of the groundshare agreement which “nobody in their right mind would have signed” as “it meant the club was totally reliant on gate receipts… this has to be one of the first things renegotiated with Mr. Kennedy.” But despite fierce linguistic and arithmetic efforts to portray “a fair deal negotiated by the football club,” the figures were greeted with dismay and anger by disgruntled fans.

There were ‘developments’ (sorry) on the ground situation, however. And changes to County’s board, both enforced and otherwise, revealed altered boardroom priorities. Ken Graham and Mike Clark became directors in September, County stressing that their sons had joined County’s ‘centre of excellence’ in 2001 and that Graham’s son Andy “scored his second goal of the season last week against Macclesfield” for County’s youth team. But the key words were “…background is within the construction industry” (Graham) and “…is a commercial property developer” (Clark). County said “(they) are aiming to spearhead the future of…the football club with the provision of new sporting facilities within the borough of Stockport, which will help broaden the relationships of the Club within the football community.” And it was also hoped these facilities would help “broaden” bank balances. These hopes were raised with reports of an agreement between Stockport Metropolitan Borough Council and Kennedy to redevelop Edgeley Park as a “Community Stadium,” with revenue split between County, the council and Kennedy’s Sale Sharks.

Kennedy had, not for the first time, threatened to move the Sharks out of Stockport altogether, an obvious negotiating tactic, which left many fans frightened that whatever ‘deal’ the council and Kennedy concocted would be more in the council’s and Kennedy’s interests than County’s. But many other fans were more cynical. “I think the smell of money is overpowering the smell of football,” noted one, as the club announced changes in their ownership structure which seemed to further separate the “strategic development” of the club from the actual football; separating the potential money-maker (ground development) from the actual loss-maker (football). To “assist the management team in the delivery of the strategic vision,” Stewart Vann was elected to the board of Stockport Community Leisure Company Limited, the club’s ultimate owner, and immediately appointed chairman. The club said Vann “has been actively involved in both football stadium and sports ground developments in the borough,” which was a truth but not the truth. “Much of his time is taken with his commercial property business,” note chartered accountants Cassons, Vann’s business advisers, which was more pertinent.

Meanwhile, magically, takeover interest appeared. The afore-mentioned Newton emerged in mid-February. The club suggesting that County “like other football league clubs, are on occasions approached by potential investors” and that the board would, naturally, review any “serious written offer of investment…if it was considered to be in the best interests” of the club. However, almost as soon as the club eventually confirmed Newton’s well-known interest, he withdrew it, claiming he and the board “were unable to agree on a combination of things,” and noting (in March, remember) that “the financial side of any club that’s relegated deteriorates” and that “the playing side” was “clearly in a terrible state.”

The not-universally-popular Mary Gibbons had become County’s acting chair in January. And genuine lifelong fan though she was, she simply wasn’t qualified to run a struggling club…certainly not one struggling this badly. Her public sycophancy towards Kennedy also grated. She told BBC Radio in February that “(Kennedy) has done us a great deal on the rent” drawing a mixture of incredulity and venom from supporters. Gibbons wasn’t helping herself. But even her strongest critics admitted she was “seemingly getting no support” from other, supposedly more savvy 2015 Group members. Gibbons, and husband Tony, resigned in May – shortly after the pressure got too much, to judge by her complaints about “miss-truths and nasty comments” from fans. And early last month, it became crystal clear what some of the ‘more savvy’ board members had been up to.

The Vital Stockport website came into possession, and published the contents, of e-mails between “a party keenly interested in buying” County and ‘commercial property businessman’ Vann. The email to the club, from Rod Gunner, Power Snooker Limited chairman, was a lengthy trawl through their proposals and the “unforeseen difficulties” which had caused “what some may perceive as hold-ups and delays.” Gunner set out his keenness to follow the “Community Stadium” model and reported on “the last two months vigorously exploring the way in which we could work with Stockport County.” But the tone of the email was one of trying to persuade sceptics, the most persuasive argument being “every shareholder will be guaranteed that their total investment in the club, including all loans, will be repaid in full.” Vann’s reply – the only one ‘leaked’, even though the email was sent to all shareholders – showed how sceptical he was. Two hours after receiving the email, he wrote: “If I understand correctly…we get our money back? (at some point in the future yet to be established). But we walk away from £15/20m or more of development profit?

“As you know,” Vann continued, “the shareholders comprise of football club fans and property developers. With respect, your email gives no comfort at this stage from my perspective.” The best interests of Stockport County Football Club, eh? Rumour and counter-rumour has abounded about the make-up of the board’s divisions over this offer. But the announcement of Evans’ directorship suggests that Vann, along with co-director Mike Clark (according to the more common rumours) were one side of the divide. And that football interests have, at the very least, not yet been submerged by “development profits.” Evans’ appointment of former German international Dietmar Hamann as manager and his classy suggestion this week that “there’s more money knocking around” (administrations notwithstanding) has led to a reversal of perceptions. County are, for now at least, big spenders. But too much has gone wrong at County and other clubs in recent times and too little is known about the source of the money knocking around for anything to be taken for granted by County fans. Scepticism should still reign. And, as I suspect many of you feared, this takeover tale is far from over.

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    8 Comments

  1. Any truth in the stories doing the rounds that a certain disqualified director, currently in residende at one of the Queen’s hotels, and with links to Merseyside, is involved somewhere in this?

    Dermot O'Dreary

    July 9, 2011

  2. I have to admit that digesting all the other rumours took hours longer than I expected, and there wasn’t enough paracetamol left in the house for me to get onto Vaughan…I presume that was who you meant…or has Jimmy Tarbuck finally been nicked for that act??
    My rather more learned colleague on this site, Mr Ian King, may know more about Vaughan’s link or otherwise. But I didn’t want to spoil his weekend. We’ll let you know what we know, when we know it…
    :-)

    Mark Murphy

    July 9, 2011

  3. I will be returning to the subject of what I have already started to call “The Vaughan Effect” during the week.

    Ian

    July 9, 2011

  4. Even if Vaughan isn’t involved, Evans (what a suitable name for a dodgy character) has gone public on saying what a good bloke Vaughan is. not very encouraging.

    Phil of Bath

    July 9, 2011

  5. If I may contend a couple of points.

    Firstly, the first paragraph indicates hypocrisy that isn’t really there. Under the Trust, a number of off-the-field mistakes were made – mostly by the MD at the time – such as a suicidal loan deal that gave another company debenture over our bank account, counting sponsorships twice in the budget, and others.

    Under 2015, by comparison, our problems were entirely on the pitch, beginning with the appointment of Paul Simpson (in retrospect, County really should have checked with his previous clubs as to why he left). You simply can’t compare those who made simple business mistakes with those were very carefully managed the business side of things.

    The Mike Newton thing is quite wrong, too. For all the desperation of most shareholders to sell their shares to absolutely anyone, Newton never made an offer. Simply a timewaster, and County aren’t the first club he’s done that to. The new John Batchelor, if you will.

    The question of shareholders is the main issue with County. In the summer of 2010, if somebody hadn’t taken over we’d have been thrown out of the League (or at least given a huge points deduction). The people behind 2015 didn’t have the funds to do so, so got others to invest – meaning the majority of shareholders were people who held no affinity to the club but were sold the idea of success. Because of the poor choice of manager, the team suffered heavily, and shareholders wanted out quickly.

    At least Brian Kennedy told John Batchelor to do one when he came sniffing around in 2005, as he knew he was bad news. Don’t be misled by that Vann email – the current shareholders don’t give a toss, as shown by their willingness to palm the club off to this next lot.

    Sean

    July 11, 2011

  6. Sean,

    You may contend. I’m grateful for the shoves in the right direction.

    I accept your points about te differing nature and scale of the problems from the Trust era and from the “Snape” era. I just recall Snape being very sniffy about the Trust and giving out the impression that he could have done better and would do better. I don’t think he’s a hypocrite. Sorry if that was the impression.

    On Newton, I just noted the timing of his “interes” and his comment about relegated clubs (in March), which emphasised just how badly relegated County were. He seems like a “tyre-kicker” to me too.

    Your last two paras are a very helpful perspective. How many shareholders are there? I’d assumed it was not a much larger group than the board(s).

    Thanks for the steers. And, assuming you are a County fan, very best wishes for the forthcoming season.

    Mark Murphy

    July 11, 2011

  7. I think there are 12 separate shareholdings, no-one with overall control. The Gibbons’s resigned from the board but still have their shares.

    And thank you for your wishes, but unfortunately amongst County fans there seems to be a resignated feeling of enjoying it while it lasts (many fans have got in into their heads that we’d have gone bust next year anyway), and so are looking forward to County spending our way to oblivion.

    Sean

    July 12, 2011

  8. You should ask my Evans Why he was selling forged football kits and selling them on ebay around 2005 and also about his ciggeret smuggleing and his dodgy claims for accident claims all known in his local aerea in Huyton liverpool.

    freemanhuyton

    April 14, 2012

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