This Week In Plymouth: The Final Chapter & A New Beginning

By on Oct 28, 2011 in English League Football, Finance, Latest | 1 comment

Clever man, that James Brent, the (drum roll)… new owner of Plymouth Argyle. In the past week he has revealed himself to be far from the philanthropic ‘saviour’ many fans have keenly labelled him, while displaying a sure political touch, to protect his financial interests, against those of staff, players and administrators owed money. Yet across those same seven days, he has re-affirmed what most people outside certain parts of Cornwall, and the mind of a certain insolvency practitioner, have known for months; that he is the best available hope for Argyle’s future – by some distance. And now he has the chance to prove it.

It was appropriate that administrators, the P&A Partnership, would be the last obstacle to a deal. The issue of their fees – the most money, to those who need it least – kept fans on tenterhooks to the end, threatening another e-mail bombardment of P&A offices. But when Brent made his “best and final offer” this week, even P&A grasped what “final” really meant, after months of missed “final” deadlines throughout the administration. And bout time too, as it was hardly a last-minute issue. Like almost everything that has gone wrong at Argyle since the CVA was agreed in May, it dates back to P&A and lead administrator Brendan Guilfoyle’s kid-glove treatment of Cornish property developer Kevin Heaney; on this occasion their failure to oblige Heaney to fund the administration while he was exclusive bidder. It’s a hoary old story, but it bears repeating.

Acting Argyle chairman Peter Ridsdale told the Plymouth Herald newspaper on 4th June that the then-preferred bidders “will pay £1m for exclusivity to the end of June.” The Herald quoted this £1m figure unchallenged on other occasions (19th May, 10th June and 15th June… at least). So the figure was correct, unless Ridsdale was… ‘mistaken.’ Had P&A held Heaney even to this obligation – let alone the price for exclusivity in July and August – they would have been paid long ago. But they did not. When Guilfoyle took the matter to court in August, Judge Pelling QC ruled that “there was no obligation to the buyer to provide further funding.” And that was the point – not, as Guilfoyle disingenuously suggested, P&A’s “willingness to write off costs.” The costs weren’t the issue. It was asking Brent to cover them, after this demonstrable failure.

Having agreed costs of £400,000 (something P&A have never actually denied), Brent was right to take negotiations close to the edge, refusing to ask staff for another “deferral waiver.” And he cutely suggested that “it is incumbent on the professionals to get things sorted out,” – a thinly-disguised reminder that P&A would soon be responsible for staff salaries. This ultimately forced a compromise – as for all their bluster about liquidating Argyle rather than take this responsibility, P&A must have known that their reputation wouldn’t survive if they did. How much more than £400,000 Brent will eventually pay – if anything – is not clear at the time of writing. But P&A seem destined to take the blame for the impasse. And it is difficult to muster any sympathy for them.

After the fraught final few days, the other issues resolved in the last fortnight seem very distant. Despite some very loud noises emanating from certain local tax payers, getting approval for Plymouth City Council’s purchase of the freehold to Home Park Stadium proved the ’easy bit.’ Both Conservative and Labour group leaders publicly supported the council’s £1.6m purchase, charging £135,000p.a. in rent, plus inflation, over a 30-year lease. The parties had 57 council seats out of… er… 57, so the vote was never going to be a cliff-hanger. And the vocal opposition was largely rubbished by the report on which the council voted. Gripes, as they usually do, centred on spending council taxpayers’ money amid cuts to services elsewhere. But the report noted that the purchase was being financed by borrowing from the council’s own “capital receipts and cash balances,” not the services budget. “It’s a failing business which is likely to cease to exist in the near future,” noted one Herald reader, incorrectly. “How much will the taxpayer get back then?” And another thought it would be “funny if the council has bought a ground belonging to a team that is no more.”

But the report said the council would get their rent (and long-term profit on the deal), regardless of Argyle’s fortunes, thanks to “associated company guarantees.” And it added that “the deal…would not be completed” unless Argyle got “approval to continue to play in the Football League.” Reading the report was clearly too much for some. “If Home Park is such a worthy investment, why are Plymouth Argyle where they are in the league?” asked another, without clarifying what the connection was between the ‘investment’ and Argyle’s prone league position. And others still claimed that as council and Conservative group leader Vivien Pengelly was an Argyle season-ticket holder, she was only pursuing the purchase to save her “free seat.” With all that ‘logic’, the chances of a judicial review of the decision are thought to be slim.

Still, many felt Plymouth’s doomed City Airport was more worthy of such council generosity and presented the issue as a choice between the two. This was a false choice. But one wag suggested Argyle could “just play at the airport and save us a lot of money.” Both morally and logistically, it proved more difficult to get the required 100% agreement from 300 individuals to Brent’s offer of salary arrears repayment over five years – another example of Brent’s philanthropy stretching only as far as his business interests. When news broke last week that “at least four individuals remain in negotiations”, fans will have hazarded a few guesses as to their identities. The Herald offered immediate clues: “…two players no longer at the club, another high-profile former employee and one figure linked to the discredited former board.” But former Chief Operating Officer Tony Campbell would not have been on everyone’s lists; while the naming (and shaming?) of recently-sacked manager Peter Reid was a disappointment to most.

It made you wonder what Reid was really thinking when Ridsdale offered him that cup of tea and started to chat about football, just after dismissing him as Argyle manager, because “it’s a results business”. It had all been very amicable, according to ‘PR-Pete.’ But Reid must have been harbouring less friendly thoughts; though probably not anything along the lines of “well, you’ve had a result because you’ve been getting paid all year, Ridsdale, so I’m going to try to get every penny owing to me,” because that would be at least part-speculation. We may never know, as Reid said nothing to the press except that it was a “private matter” which became untrue given how pivotal his initial refusal to accept Brent’s offer could have been. Campbell, on the other hand, said pretty much everything. And he became a more complex issue than he imagined he was, as Argyle fans temporarily abandoned the well-informed sense of fairness which has so characterised them.

Campbell was owed severance pay after being made redundant by P&A on March 7th, three days after Argyle entered administration. And independent lawyers Foot Anstey – appointed by Brent to advise staff owed money because of the administration – advised Campbell that Brent’s offer was below his legal entitlement – demonstrating Foot Anstey’s independence more clearly than Brent might have wished. He has long divided opinion among Argyle fans, being a self-professed genuine fan… who introduced Japanese directors to the club in 2009 – the moment to which all Argyle’s current financial woes can be directly traced back. And reaction to his refusal to accept Brent’s offer mirrored those pre-judgements.

The real issue, whether he was entitled to full severance pay just as unpaid staff and players were entitled to full pay arrears, was submerged. And although his critics claimed he was getting “the same offer as everyone else”, it was the first time that the amount of money was the issue, as opposed to the five-year repayment offer. Campbell professed an unlikely ignorance of employment law, calling the ‘TUPE’ regulations “Trade Union (if only…) Protection of Employment’ (the ‘TU’ actually stands for ‘Transfer of Undertaking’). But the legislation bars detrimental changes to terms and conditions as a direct result of the transfer. So Campbell’s severance pay terms transferred with him when Argyle’s ownership transferred to the administrators.

Previously – and subsequently – impressive spokespeople argued superfluously over whose responsibility the severance payment was, even though Brent had taken that responsibility by making an offer in the first place. And others argued that because 15 other laid-off staff had accepted their payments, Campbell should too, suggesting that legal challenges would be made if Campbell received improved terms, even though the 15 had accepted their own terms in writing. Campbell also claimed Ridsdale tried to “intimidate” him by suggesting that his refusal would cause “the club to fold” and that “I would feel the full anger of the supporters and that I would have no option but to leave the city.” Claims that Ridsdale was quoted “out of context” were an admission that he had said those things. And whatever the context, the suggestion that Campbell “would have no option but to leave the city” was particularly grubby and could hardly but intimidate.

Mercifully for Argyle’s future, Campbell and Reid both accepted their offers. But the treatment of Campbell by some high-profile protagonists was a rare lapse in otherwise high standards of judgement. After all, Campbell was arguing for his employment rights…there’s a clue in the name. Briefly, it appeared that only logistical problems were preventing everyone signing their agreements. And these were considerable, given the far-flung locations of some ex-players and staff – ranging from Eastern Europe to a town called “her majesty’s pleasure.”

However, even some of these stragglers were “understood to be querying the terms” of their agreements. But the process, which was daily redefining to the word ‘gradual’, is now at an end. Only the Football League’s approval is now required. And that, given the lengths and breadths to which Brent has publicly gone this week, must at least be likely. Brent’s suggestion that the hard work will now begin is likely. Argyle’s finances remain dire. And their league position, in polite terms, is “adrift.” But Brent himself remains a key factor in their favour.  Everybody who is likely to be involved in Argyle’s future, not least the continually unpaid staff and players, has shown a great deal of patience with Brent. And rightly so. He has been open about the limitations of his plans for the club, not least his unwillingness to “provide equity” for Argyle at the expense of his other business interests. And his words would not convince if uttered by, to pick an example purely at random, Cornish property-developer Kevin Heaney. Indeed, some Argyle fans were querying his willingness to “save the club” as he wouldn’t “stump up a nominal amount of money (relative to his wealth)” to end the last impasse with P&A.

It is also true that Brent would have been less likely to get involved with Argyle if his Akkeron Hotel Group didn’t stand to benefit from the land transactions associated with the council’s purchase of Home Park. But during the last eight months of unseemly faffing around, and two prior years of mismanagement, the three qualities which have been most sadly lacking at Argyle have been good business sense, realism… and staff salaries. Brent has most ably displayed the first two qualities since he came on the Argyle scene. And, salaries, we are promised, will quickly follow – which, despite all the joy about a football club saved – is the most practical progress made this week. Splashing the cash, as Brent told the Fans United gathering last month, will have to come from “our successors rather than us.” So there’ll be little drama during the January Transfer Window. But after the drama of the last eight months, I’m sure Argyle fans won’t mind a bit.

You can follow Twohundredpercent on Twitter by clicking here.

Share Button

    1 Comment

  1. Without knowing all the details that you have so eloquently explained, nevertheless I felt compelled to include something in my blog to sdhare the sense of relief that followers of other clubs have for Argyle now that the future seems more secure at Home Park. I hope you agree with my sentiments at http://snoppersays.blogspot.com/

    Peter Hopgood

    October 30, 2011

Trackbacks/Pingbacks

  1. Round-up of Season 2011/12 « Football Management - [...] Plymouth Argyle It seems some time ago now, but the final chapter in the club’s survival was last October, …

Post a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>