AFC Bournemouth: There’s Something About Eddie

By on Nov 21, 2011 in English League Football, Finance, Latest | 0 comments

It was a minor exchange among ‘readers’ comments’ in Bournemouth’s Daily Echo newspaper. But it summed up much about AFC Bournemouth under current chairman Eddie Mitchell. The exchange concerned the relationship between parent company, AFC Bournemouth Limited, and a company set up by Mitchell, AFCB’s then-largest individual shareholder, called Black Label Events (BLE), which runs catering and conferencing at Bournemouth’s Seward Stadium. One reader believed they were separate entities and that Bournemouth wasn’t “entitled to any profit” from BLE. “The way I read it,” another said, “isn’t (Mitchell) saying the opposite?” You could almost envisage Mitchell hanging up his “Mission Accomplished” banner.

Property developer Mitchell’s disingenuousness has peppered his chairmanship of the club, and he came to national attention in September with behaviour which even FIFA President Sepp Blatter might have considered “a bit crass.” At a September the first fans’ forum, he told a dissenting supporter to “go and support Southampton.” And after Bournemouth’s 3-0 home defeat to Chesterfield nine days later, he took to the pitch, microphone in hand, to offer some (tired and) emotional suggestions to fans chanting for his departure. Events immediately surrounding these rants were expertly covered by Ian King at the time, but things had been brewing for ages. And post-rant events have provided more intrigue, and more trademark Mitchell disingenuousness.

Since becoming chairman, in June 2009, Mitchell has carefully chosen his words, regularly ‘updating’ supporters – usually via the Echo’s over-welcoming pages – on Bournemouth’s steady, painstaking progress towards ‘debt-freedom’. He told a July 2010 fans forum: “We are getting very near to the end of the debt…from a considerable amount down to £300,000…by October we’d like to think we’d be debt-free.” This seemed a considerable achievement, having inherited a club in a mess. The execrable Sport-6 ‘organisation’, fronted by the larger-than-life Alastair Saverimutto and the simply-large Paul Baker, had run Bournemouth as if they had been mistaken for real owners, but thought ‘hey, let’s give it a go, it can’t be that difficult.’

The accounts for Sport-6’s year-long tenure, published in October 2010, revealed £1.8m losses, while auditors cited “inadequate accounting records” which left them “unable to form an opinion as to whether the financial statements give a true and fair view” or whether they were even prepared legally. Indeed, so wrong were they that they had to be “re-stated” in the accounts to 31st July 2010, to include £253,145 of previously un-noticed net liabilities. The 2010 accounts also revealed that Mitchell’s debt-reduction claims were… untrue. He had been referring to AFCB’s ‘legacy debt,’ Sport-6’s £1.8m losses. In July 2010, AFCB’s current liabilities exceeded total assets by… £1.8m. Both accounts were “abbreviated”, as company turnover was somehow small enough, during a promotion season, for exemption from publishing full accounts. So the company’s specific trading under Mitchell – and the breakdown of the startling increase of £1,497,259 in the amount due to creditors “within one year” – was available for speculation only.

The figures did show that, between them, Mitchell, his wife Brenda and director and vice-chairman Jeff Mostyn loaned Bournemouth £720,000 in 2009/10, “interest-free and repayable on demand.” And “during the previous period” self-styled “charity man” Adam Murry, who nominally led the takeover from Sport-6, loaned Bournemouth £125,000 “which was not to be repaid and was written off as income.” A month later, In September 2011, Mitchell still insisted his soon-to-be-debt-free club announcements “were true,” because “we did not consider these loans to be, in real terms, ‘debt.’” He explained that “if… needed, we would write them off.” But “only until such time as the club could repay them,” which, in real terms, wasn’t a write-off at all; and £1.5m worth of extra creditors remained unexplained. In such circumstances, Bournemouth’s 2010/11 transfer policy was understandable.

The team’s remarkable promotion challenge under excellent young manager Eddie Howe stalled after losing key players…and Howe himself in January. But new manager, Lee Bradbury, steered Bournemouth into the play-offs. And player sales could hardly be blamed for their penalty shoot-out defeat to Huddersfield (except by the fans that would criticise Mitchell for not sneezing every time he coughed). But Mitchell had talked up finances throughout. Transfer income and compensation payments for Howe and also-departed assistant Jason Tindall gave Bournemouth “security” and “money in the bank”, while expenditure and income “(competed) with each other.” Why, then, the need for player sales? And Mitchell’s financial updates had lacked… figures. His February admission, that stadium rent arrears to landlord Structadene were “just over £100,000” was rare detail.

Without Mitchell’s apparent disingenuous, fans’ anger at summer departures might have been tempered (even his genuine point about Bournemouth’s inability to offer competitive salaries failed to explain the relatively few arrivals). Mitchell met this anger head-on in September, with shameful consequences. Sadly, Mitchell learned no lessons from this. In what was either an ill-advised joke or a mountainous lack of self-awareness, Mitchell gave the Echo an alternative version of events which defied rational analysis. “It was nothing, I have forgotten all about it,” he told Echo journalist Neil Perrett the following day, having just described “it” almost frame-by-frame. “If there has been a public outcry, I haven’t seen it…I have been indoors most of the day,” he added, inviting suggestions that he had been “indoors” sleeping off the hangover from pre-pitch incursion drinks.

Perrett responded with an ultra-critical open letter to Mitchell, who responded in turn with “new press guidelines” (translation: “I’m not talking to the Echo again”). Mitchell’s method of dealing with the fall-out was tried and tested. In 2010, he had diverted attention from questions on club finances by focusing on ‘buying the ground’ and ‘potential Russian investment.’ Then, focusing on the ground meant floating the populist idea of a “trust” to get “the stadium back into the ownership of the club and its supporters” (the ground had been sold by and leased-back to Bournemouth in 2005 during a previous financial crisis). Now, he announced that the club had “secured the assignment of a 999-year lease at the South End of the ground” which would allow the construction of a new stand to essentially complete a three-sided ground – a long-stated ambition of club and fans.

Mitchell’s logic then was that “a company or an individual buying back the stadium is not the right thing for the club” (Echo, 16th July 2010). Now, Mitchell announced that “we” had made two offers, the highest being “£4.5m.” Fans questioned whether “the club and its supporters” would benefit, or a company…such as, say, Mitchell’s Black Label Events. But the announcement was the necessary diversion, as was “confirmation” of “new investment” from Russian “tycoon”, Maxim Demin. In 2010, there was genuine interest in Bournemouth from “Russian duo Vladimir Antonov and Roman Dubov,” whose business backgrounds contained more murk than ten British winters. They still bought Portsmouth in June (cynics might say it made that purchase borderline-inevitable). But Mitchell and, we had to assume, the other shareholders weren’t interested.

They were interested in Demin, though. Speculation abounded that Mostyn and co-director Steve Sly wanted to sell their combined 50% shareholding. And while the new anti-Echo Mitchell condemned this speculation, it was accurate. Demin lives in the well-heeled Sandbanks area of Bournemouth’s neighbouring town Poole, home to such paragons of financial virtue as ex-Bournemouth boss Harry Redknapp. Demin’s house was built by Mitchell’s ‘Seven Developments’ company. Fans put two-and-two together and, for once, made four. When Demin’s name became public, his “new investment” was welcomed by Bradbury and many fans. One Echo reader offered “a note of caution” as there was “no mention of additional investment” beyond paying Mostyn and Sly for their shares. But his words went largely unheeded, and Demin’s future input remains unclear. Most financial activity appears linked to facilities, rather than first-team, development. And Russian press reports that he had bought into “a Premier Division team… currently 21st in the charts,” (Voice of Russia, 28th October) were scarcely less-informative than official club information about his petrochemicals background.

In the long-term, towards which Mitchell claims he is building, updated facilities would generate income. And his declared policy of financial prudence and building for the future, “from the bottom,” is a good one, especially though not exclusively in harsh economic times. But doubts remain about his true motives. He is not trusted, and whatever he may think, he has not earned that trust; as exposed by his reaction to genuine questions about the 2010 accounts. At the September forum, Mitchell promised answers “by detail” to any e-mailed questions. Some answers part-allayed fans’ concerns, but left key issues unaddressed…and only emerged from an Echo journalist quoting a “club source I trust” on his Twitter page. When Mitchell did address the accounts issue, during a cringeworthily stage-managed Q&A video on the club’s web-site, he contrived to be more insulting than ever. “People can download them off the Companies House web-site” he dismissively replied to suggestions that full accounts be published. Only abbreviated accounts could be downloaded. But the off-camera interviewer, sounding like a nervous 17-year-old with embarrassing acne, failed to make the distinction.

Mitchell had clearly ignored detailed e-mail questions, as they were based on the already-downloaded accounts. And his conclusion was “if they want to come in and do the accounts for us, that’s fine.” It would be a shock if someone actually took him up on this sneering, patronising offer. So fans want proof that the ever-extending family of BLE companies running catering operations really gives “every penny… back into the club”, as Mitchell says; especially given the logic for not making them subsidiaries of the club’s parent company. “If the money had simply been coming into AFC Bournemouth Limited, we would have had no means of telling how much we were making,” he said, to the disbelief of accountants who suggested that the “means” were available and not overly-complicated. The service was previously outsourced to a company called Pumpkin, who handed over £80,000-per-annum for the privilege and, said Mitchell, “(took) any money over that as theirs.” BLE were making “far in excess” of that (Echo Q&A, 15th August).

At the September forum, club CEO (and Mitchell son-in-law) Neil Blake said BLE had “basically broken even.” Squaring that financial circle was another question to which Mitchell promised answers “by detail.” Without written evidence of all BLE’s “profits” going “back into the club” (and without a definition of BLE’s “profits”) fans have to take Mitchell’s word. With so many questions unanswered, many fans are not.Mitchell has gone through the ‘under-fire club owners’ textbook: citing, but not substantiating, death threats, and claiming his “wife and kids” were suffering abuse from fans, neglecting to add that his wife is company secretary and two of his “kids” are 20-odd-year-old company directors. He has also positioned himself as club saviour – “I stepped in when nobody else wanted to” – although he took over as part of a four-man consortium. And “because of my actions, the club have (had) two seasons of great success,” as if Eddie Howe never existed.

Mitchell has therefore polarised opinion when, as ever, the truth is somewhere in-between. Financially prudent, yes. But disingenuous? Yes, too.  And would he be anywhere near the Seward Stadium if it didn’t present such lucrative potential for his struggling property development companies – one of which was the subject of a winding-up petition only last month?  Only when he can answer “yes” to that… and prove it, will fans trust him, or even begin to forgive him for his shameful behaviour off and, infamously, on the pitch this season.

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