Plymouth’s Administration: More Questions Than Answers
It is never helpful if, while writing about a situation, one of its main protagonists pipes up just before the proof-reading stage to issue a statement claiming the equivalent of “the earth is flat, the moon is made of cheese, and I’m taking my ball home if anyone argues.” So it was that Mark Murphy’s latest summary of the latest events at Plymouth Argyle was a bit rushed and disjointed. This is what he meant to say:
When prospective Plymouth Argyle owner James Brent told fans at last month’s ‘Fans United’ day that “until we (buy Argyle) there’s always going to be that bit of risk”, surely even he didn’t think things would be like… this.
Unless someone said: “I’ll pay the debts… and here’s £10m on top,” there were always going to be takeover issues which took time to resolve, even in a takeover as long-anticipated and popular/populist as Brent’s. But Brent has inspired an alliance of the disaffected in recent weeks; from avaricious administrators to curmudgeonly council tax payers, with even Argyle’s staff, who will be paid at last, not universally happy about just how “last.” As everyone acknowledges (except certain ‘P&A Partners’ seemingly), four months of negotiating with preferred bidder ‘Bishop International Limited’ were a waste of time and money. Kevin Heaney claimed financial wherewithal which even a Greek government fiddling Eurozone membership would have rejected as “pushing it.” Yet P&A believed him. But they want paying anyway. Still, though this spell in administration costs £280-per-hour, on average. Performance-related pay has yet to permeate insolvency practice; otherwise Plymouth’s three joint administrators – especially Brendan Guilfoyle – might well owe money by now.
Last Friday’s set-to, started by P&A’s refusal to pay ‘promised’ salary to Argyle staff and players and continued by fans’ e-mail ‘bombardment’ demanding P&A cough up, was all about P&A’s fees. They want guarantees of most of the £700,000 charges for their work since March. And having failed to receive full payment from Heaney/BIL – or even oblige them to provide it – they want Brent’s takeover vehicle ‘Green Pilgrim Limited’ to stump up the cash, even though four months of the work didn’t involve Brent at all. Brent’s response has been what someone with his unerringly polite demeanour would say instead of ‘foxtrot oscar.’ Importantly, Brent says “fees and costs (of) several hundred thousand pounds” can be paid to, “and/or…(taken) out of the business” by, P&A. More importantly, Brent claims “this limit was agreed in March and re-affirmed in September.” If so, there should not be any negotiations. Guilfoyle revealed how things looked from his alternative world, in his first significant statement since August. Fears that P&A had locked him in a proverbial cupboard for the duration were spectacularly allayed by his threat to resign, if Argyle fans didn’t stop their e-mail ‘bombardment,’ which included ones so “foul, abusive and threatening” that Guilfoyle has… failed to provide any evidence they exist.
The threat has been withdrawn – because of fans’ pressure, fans say, because the firm will be getting no more e-mails, the firm say. But while fans’ campaign failed in its ultimate purpose, to force P&A to pay staff, a point was made; no wrangling over administrators’ fees will be allowed to delay the takeover itself. However, Guilfoyle insisted their fees were still negotiable because Brent’s offered contribution to administration costs “is currently unacceptable.” Brent insists that “upon completion we will comply with our agreement.” These positions are incompatible. So someone is mistaken… or ‘mistaken.’
Someone is also mistaken/‘mistaken’ over whether there were any promised salary payments last week. Amid fans’ indignation, one asked pertinently: “When and where was the promise made to pay staff?” And no-one could tell him. There were reports of P&A using “ring-fenced” season-ticket monies and matchday gate receipts from September home games to “aid staff.” (Plymouth Herald, September 30th). The Herald added: “That means (staff) were expecting a further 10% (of their September salaries) last night” following the September 24th home game against Macclesfield. And staff “would be boosted by a bumper crowd against Accrington Stanley on October 8th.” While acting chairman Peter Ridsdale said on October 1st: “staff… along with the players, stand to gain financially from a big party crowd” for the Accrington game, which marked Argyle’s 125th birthday. The only ‘official’ reference to such matters, however, was P&A’s report to creditors covering their first six months’ work. This said administrators were “entitled to draw a proportion of the season-ticket monies after each home game.” It continued: “These funds, together with matchday gate receipts, enable the joint administrators to meet the running costs of the club,” and crucially added: “with the exception of wages,” which were then the responsibility of ‘preferred bidder’ Heaney/BIL.
This explained Guilfoyle’s statement that “we can’t pay the wages” because “we don’t have the surplus after deducting the costs we have to pay for running the club.” And his list of costs was an admission of where P&A’s priorities lay. Some were requirements (VAT, match expenses, insurance premiums). However, “utilities” may have been the first word to come into Guilfoyle’s head as he was so rushed in getting the statement out, what with all the e-mails “disrupting our business.” There were “valuers”… of what?; and “ancillary professional fees… and the PFA’s solicitors.” People waiting less time than staff for proper payment who, it can surely be assumed, can afford to wait for longer. This also suggested that the PFA’s solicitors were a higher P&A priority than the players being represented.
But if Guilfoyle was being honest – and I know the size of that particular ‘if’, given that he lied in June about Heaney’s involvement as a bidder – why were staff allowed to expect money after the Accrington game… and a specific 12%, too. Fans’ reliance on newspaper reports seemed odd, given the criticism the Herald has received – rightly or wrongly – from those fans throughout the administration process. But if the Herald was misleading, or wrong, why did P&A not correct the mistake? If money wasn’t available, which P&A would have known once the Accrington receipts were counted, why let that impression last until the money was ‘due?’ And what, then, did Ridsdale mean by “staff and players stand to gain financially from a big party crowd”? The Herald interpreted this, without subsequent comment by P&A, as “the gate receipts will be used to pay…staff and players some of the money they are still owed for their September wages.” Ridsdale would have known that this was how his words would be interpreted, and if he was being honest, that would have been the only interpretation. Otherwise it would be like advertising an early season-ticket sales campaign by claiming the money would go to strengthen the team, when instead it was destined to pay off tax arr…ah, hang on…
Back in Guilfoyle’s world, Plymouth City Council made him stick with Heaney long after this world had seen through him. “From the outset of the administration,” Guilfoyle stated, the council “made it clear that they wanted… a private sector solution.” This was true, but this was never ahead of no solution at all, hence council involvement ‘from the outset’ in the ‘Contingency Plan Committee’ set up in July to form an alternative to the failing Heaney. And Guilfoyle was, for the umpteenth time, unwittingly revealing when he added that only when Heaney withdrew could he assure the council that “no private sector solution was available” (one can only wonder how much longer he would have let things go on, had Heaney not withdrawn).
This will have fascinated rival bidder Paul Buttivant who even now is posing as back-up should Brent’s bid also fail. If the council were that determined on a private sector solution they would surely not have been happy with Guilfoyle’s dismissive attitude to Buttivant ‘from the outset.’ Again, Guilfoyle stated a truth, but not the truth, in reminding everyone that “the offer made by the Akkeron Group in March was, at that stage, unacceptable, to the company’s creditors.” But Akkeron’s offer was also “a better solution to all Plymouth Argyle’s stakeholders than liquidation.” And we know this because in April, Guilfoyle said so. So, once again, it boiled down to Guilfoyle’s willingness to “pursue” Heaney for a sale, in the face of all the evidence and odds.
A Brent takeover faces three other obstacles. Certain council taxpayers are insistent on a “private sector solution,” to the point of avoiding the facts. Yet amid ill-informed ‘taxpayers alliance’ rantings and those who don’t want to pay for anything they personally don’t use, there are voices of genuine concern over spending money anywhere near a financially-failed football club when there are deep council cuts elsewhere. Some of these voices have been Argyle fans, whose concerns about this and the plan to pay salary arrears over five years have merged into a general concern about Brent’s financial capabilities. Council taxpayers’ concerns remain based on a general aversion to football, rather than any specific proposals. But it was still wise for the council to postpone any decision on purchasing Home Park until they were sure they had a cast-iron financial case for doing so. On the surface, the deal will profit council taxpayers; but not yet. Whatever the council propose spending on purchasing Home Park (“widely believed to be around £1.6m” Herald, October 6th), they expect to receive in rent over ten years.
Nonetheless, they said on October 7th that the “complex legal and commercial issues” needed more consideration – more wisdom, given threats of a judicial review of any decision to buy the ground. So plans for the council’s “cabinet” to debate the issue last Monday before putting proposals to the full council, were postponed until tomorrow (October 18th). With both council group leaders in favour of the purchase, there seems little doubt that the proposals will be accepted. But there is no such unanimity amongst the electorate. So any arguments that opponents will continue to put forward, however superfluous or ill-informed, need to be countered – factually and coherently – as soon as possible.
Brent’s proposals have, allegedly, involved public sector involvement ‘from the outset.’ Brent said at the ‘Fans United’ Day on September 24th that “in an ideal world, government should not be putting money into football stadiums.” But he later added that “we’ve made it clear we would not make an investment without the council alongside us.” And he also ‘made it clear’ that I’m not willing to chuck money willy-nilly at any football club.” So fans should not be surprised that he requires council support. Staff having to wait five years for their pay arrears was more surprising, even though Brent is clearly applying the same financial principles, hence his reference to what his company can “safely offer.”
Five years seems ages to repay a few months’ money. But a lot of former players on Championship salaries would be owed quite a bit of cash, hence Ridsdale’s reference to “interesting debates with ex-players or ex-members of staff.” Let’s hope “ex-members” doesn’t somehow translate as “ex-directors.” And that the neediest can somehow be recompensed the quickest. Meanwhile, 16-year-old striker Matt Lecointe scored his first senior goal for Argyle to set up their 3-2 victory at Dagenham last Saturday, in the wake of reported interest from Premier League and Championship clubs. As Lecointe is what is termed a “scholar” on Planet Guilfoyle – under-17 – he can be sold outside the transfer window – fellow mid-teen Jack Stephens fetched £150,000 in the early stages of administration (destination of said cash, unclear).
Ridsdale declined to say “hands-off” to interested clubs last week, preferring to wish that “scouts were looking at our players every week.” The Herald noted, casually, that the “interest in Lecointe appears to coincide with (the) wrangle over administrators’ fees.” Brent, meanwhile – cool as you like – said it was “not obvious… why we would want to sell a good player” prior to his takeover. He expected to be asked before any sale and said he would only agree if Argyle’s “purchase price” was reduced by any transfer fee received. So, will Argyle finally be sold? Ridsdale shuffled some of his favoured buzz words – confident, green light, over the line, hopeful – into an acceptable order for the fans’ meeting he addressed in Dagenham on Saturday. And the council should agree the purchase of Home Park. But until Brent actually buys the club, “there is,” as he said himself, “always going to be that bit of risk,” words which are as true now as they’ve always been.
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