Port Vale: Reserving The Right To Criticise

By on Aug 31, 2012 in Finance, Latest | 1 comment

The benefits of hindsight are many. And reviewing the fretful close season that Port Vale fans have just endured, I am glad that I “knew the result” of the negotiations on Lancashire businessman Keith Ryder’s putative club takeover. Otherwise I would have feared for them mightily. Vale ended last season in administration with “preferred bidder” Ryder having agreed a deal with creditors to take the club out of administration. They started the new season in administration, with no “preferred bidder” having agreed anything. And yet, Vale are arguably in a safer position now, with genuine hopes that the summer’s mistakes can be rectified.

Ryder, Bob Young, a senior partner of administrators Begbies Traynor, and the Football League spent their summer in what appeared to be negotiations over every line of every agreement required to facilitate the takeover. Yet ultimately, Ryder failed to deliver on the key aspect of his takeover… the money to pay for it. And the Vale fan base was left as divided as they had ever been, even during the darkest days of protest against the regime which took them into administration in March. Ryder was swiftly selected as Vale’s “preferred bidder” in April having offered more money for creditors than any other bids received by the administrators. He also provided the administrators with the requisite “proof of funds.” Yet this “proof” was worthless, as when Ryder needed to provide the ultimate proof, i.e. the funds themselves, he could only provide a list of excuses from the centre of “dog ate my homework” territory.

Ryder’s final explanation for this failure was “family health problems,” which could very well be genuine – although the explanation has the advantage of making doubters and cynics seem extra-insensitive. But Port Vale’s Supporters Club (SC) noted recently that: “The Supporters Club has not heard from Mr Ryder since Monday August 6th, and neither have the administrators.” In response, the administrators made the unusual, and unusually bold, commitment to run Vale until April 2013, or until they find a buyer. Young told an SC meeting on August 7th that “as long as the average attendance doesn’t fall below 5,000, we can do that, even if we don’t find a buyer.” Vale’s average attendance over the last two seasons was 5,007. Young announced last week that there were five “parties” interested in Vale. They are undertaking “due diligence”. And this time, the administrators can return the favour, unlike April, when they were keen on a “perfect” administration. Get parties interested. Get their offers. And award preferred bidder status to the biggest offer with “proof of funding.”

Ryder’s “proof”, Young told BBC Radio Stoke on August 1st, was “copies of a bank statement… for an account that shows he does have the money.” Young added: “The balance in that account has at no stage fallen below the amount he needs to pay.” But these funds were never ring-fenced. And Young confessed: “I believe he does have the money to complete (but) I am confused as to why he hasn’t.” Ryder’s explanation for non-payment didn’t help: “He tried, he said, to send a transfer of funds last week,” Young told an increasingly incredulous BBC interviewer. “Apparently his bank put it on a three-day transfer (and) when I said we want to do the deal today…the bank stopped the three-day payment but the money doesn’t appear to have gone back into his account to enable the one-day payment to be made. “At least that’s what Keith’s telling me,” Young concluded, to a chorus of disbelieving chortles all over Burslem. “We are still waiting to see if Mr Ryder is going to complete,” Young told Radio Stoke on August 9th, surprising no-one.

More encouragingly, once the administrators select their new preferred bidder (or resurrect Ryder’s deal if his money ever shows up), the exit from administration should follow relatively quickly. In order to avoid a ten-point deduction for starting this season in administration, a commitment had to be made to honour the financial arrangements agreed with Vale’s creditors back in April. So, no time will elapse agreeing and approving a CVA. There is, of course, always scope for football club administrations to go wrong. And having seen defeat snatched from the jaws of victory more than once recently, Vale fans retain the right to be uber-sceptical and cynical. It is a right some had to defend. One reader’s comment on my last Vale piece lambasted me for labelling one of the leading characters in Vale’s tale, local businessman Mo Chaudry, a “fans’ favourite” and for falling for “propaganda” from one particular Vale fans’ website.

Chaudry’s ego-driven attempts to buy Vale all failed when they came to the crunch. I suspect I share the reader’s distaste for Chaudry. And I recognised the reader as one of the reasoned contributors to newspaper and website forums. Yet his criticisms were emotive. So the discourse among Vale fans with wider differences was highly emotive. Arguments still rage over the ultimate responsibility for putting Vale into administration in the first place. Many blame the previous board, who ran Vale at considerable financial losses for many years. Ex-chairman Bill Bratt “admitted” in 2008 that the nominally supporter-run Valiant 2001 (V2001) organisation had “taken the club as far as we can.” Yet they appeared keener on clinging to power than accepting the “inward investment” they claimed Vale needed.

Many cite fan protests against the board, especially the “Starve ‘Em Out” (SEO) campaign, which organised fans’ boycotts of season-ticket and other merchandise sales. Ordinarily, such protests, which received significant support, would have forced the board out. But with these directors seemingly prioritising their own survival above Vale’s, SEO were doomed to fail. And now the “significant”  financial losses caused by SEO’s campaigning are being blamed for Vale’s administration, which some fans still insist would not have happened but for these costs and those of policing fans’ protests. Ryder’s selection as preferred bidder appeared to signal a new era, worthy of support, largely thanks to his initial pro-active engagement with fans, via the SC. But fans soon argued about Ryder, as the missed deadlines mounted and his excuses became more contorted.

Some were on Ryder’s case almost immediately, when the idea emerged that Ryder might pay for the takeover in instalments. “Too good to be true again,” noted one “Vale fan of over 60 years,” barely a fortnight after Ryder became preferred bidder. But even those merely “reserving the right to criticise” were labelled part of the “Carry On Moaning” brigade. “What are they going to do this season to play their part in Port Vale’s rejuvenation?” came the question. Speculation abounded throughout the summer as to Ryder’s true motivation, particularly his “links to the old regime,” (loaning Vale £100,000 in January) which were an irretrievable blot on his copybook for many. But speculation only filled a hole dug by a lack of club communication and takeover progress. There was none of either between May 30th, when the Football League said they were seeking “further information” on Ryder’s business plan for the club and June 21st, when the League said they were still looking.

News also emerged that the players’ own union had to loan Vale’s administrators the money to pay the players at the end of May. “There was no problem,” insisted Young. And indeed the Professional Footballers Association (PFA) had offered to “support the club through the takeover process” and “loan them money when they needed it.” But the payments were late; there was confusion over the guarantors of the loan. And, as one Vale fan commented on the Port Vale Online website: “Several things during this process have not quite added up.” Remarkably, the SC were criticised for supposedly withholding key information from supporters – commercial confidentiality wasn’t an acceptable concept for some – even when the SC was the only source of club information. And when SC chairman Pete Williams started to detect a pattern with Ryder’s negotiations, he apparently joined the “Carry on Moaning Brigade.”

Young told the Sentinel newspaper on July 14th that takeover negotiations “should now be done and dusted. I don’t see any obstacles.” And Williams noted that Young’s pronouncement was “obviously good news if that is the case,” but added: “Mr Young told us a fortnight ago that the deal would be ratified in a couple of days.” “That’s the way, Pete,” commented the ironically-named ‘Vale for Real’, “begin moaning before Ryder has even got his feet under the table.” But Williams’ concerns were well-founded even then, and proved more so with every passing July day. Many fans clung onto the hope that Ryder would deliver, even after the “bank transfer”  excuses. There was a logic to this. Ryder committed some notable finance during July. He met his contractual obligation to pay £60,000 towards payroll costs and also funded Vale’s pre-season trip to Ireland. “He is obviously not a hot-air merchant,” claimed one Ryder supporter, a statement to which history has not been kind.

Ryder’s limited investment gave credence to the more thoughtful speculation on fan-site forums. The more outlandish speculation ranged from Ryder fleeing Britain to “his” money being tied up in hedge funds or pension funds. But the idea that Ryder had, and then lost, financial backing from others made more sense. A major sticking point in Ryder’s talks with the Football League was what the local Sentinel newspaper described on as “a disagreement over the commercial development of Vale Park.”  Whilst Bob Young passed this off as “a matter of the wording”, hindsight suggests it was more important than that, and that the new “wording” limited both the scope of such development and the potential of future profit for any investor(s) Ryder had attracted. And last week, one Sentinel reader said Ryder’s “fellow directors pulled out,” a claim not yet questioned. Nevertheless, Vale are up-and-running, with early results at the very least quashing fears of a relegation battle. There is also a clear management structure off the field, with Begbies Traynor’s Steve Currie on top of the “day-to-day decision-making.”

Divisions still remain. The administrators’ announcement last week that “it might be a couple of weeks before we get a firm offer” drew the headlines “No new bids likely in the next two weeks” and “Administrators expecting bid in next fortnight.” Rumours still circulate. “One of the bidders is rumoured to involve former directors,”  said one Vale fan, a phrase which seems to be a contractual obligation. Former Vale suitor Mike Newton recently left the board of Oldham Athletic and apparently confirmed he was looking to buy Vale with the phrase “I am not looking to buy Port Vale.” But the administrators now have the opportunity to sell the club to the right bidder, with proven funding and proven business sense. It is an opportunity which simply has to be taken.

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    1 Comment

  1. Port Vale fans should stick to getting behind the team instead of getting involved with things they know nowt about. After costing us 2 promotions with their policy of domestic violence ( “don’t worry love, you’ll feel alot better when I stop beating you up”) it now transpires that they are equally incompetent when it comes to balancing the books.

    This week, Supporters’ Club chairman Pete Williams said: “The Sproson Fund to raise money to pay for the statue (Phil Sproson’s statue for the uninitiated) was set up as far back as 2001 and, over the years, has involved the support and commitment of thousands of supporters. “We will be selling ‘Save The Vale’ T-shirts on the day of the unveiling at reduced prices to help bridge a £3,000 shortfall in the overall costs of the project.”

    So they’ve run up losses over a 11 year period and the only task was to put up a statue. Good job they weren’t running a company in the leisure sector with a £4m turnover. Priceless.

    Phil from Normacot

    October 25, 2012

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