Stockport County – No-one Is Innocent

Stockport County – No-one Is Innocent

By on Apr 15, 2010 in English League Football, Finance, Latest | 8 comments

As football club nicknames go, “The Hatters” isn’t the luckiest. First Luton headed for a remake of their 1988 FA Cup semi-final meeting with Wimbledon this season, in the Blue Square Premier. And, for much of the last year, Stockport County have been heading the same way. “Where to start?” is both a literal and metaphorical question, although to be fair to fans of the Hatt… sorry… ’County’, the blame game at Stockport is probably harder to play than Scrabble these days, now that Scrabble allows proper nouns. No-one is innocent.

Perhaps the most evocative starting point would be ex-chairman Brendan Elwood’s madcap 2000 scheme to merge with Manchester City and form “Man-Stock County” – a stupid hybrid name reminiscent of unimaginative 1970s football comics and, as such, entirely appropriate to the idea. Briefly, of course, Stockport/Manchester City was the Manchester derby, with County briefly the ‘bigger’ team. But that added no credibility to the scheme, which would be no dafter if suggested now. And there’s been equal credibility attached to the financial management of the club ever since.

The dealings between Elwood and self-styled ‘sports philanthropist’ Brian Kennedy governed what followed. Elwood chaired County’s late-90s golden era. Kennedy was a double-glazing salesman…sorry…entrepreneur, who cleaned enough windows to be 178th= on 2009’s Sunday Times Rich List. Elwood sold County to Kennedy’s ‘Cheshire Sports’ company in 2003, believing he was dealing with a sports philanthropist. To Elwood, ‘Cheshire Sports’ was a sporting family, based on County and Sharks, and living at County’s home, Edgeley Park – a small, ramshackle ground for lower-league football but borderline-palatial for egg-chasing. Elwood was disabused of that notion as Sharks remained Kennedy’s focus, despite his protestations that “I’m not about rugby, I’m about sport” (Kennedy’s ‘rich list’ profile highlights Sale Sharks but not County). And the die was cast when Kennedy took the populist route in 2005 of selling County to the supporters’ trust.

Supporters’ Trusts had a decent track record of crisis management at lower-league and non-league level, although the movement’s many detractors saw this as the ownership model’s limit. However, the Stockport Trust did things in reverse order, signing a takeover deal which precipitated a crisis to manage. The deal required and received Elwood’s sanction, after Elwood received assurances over the “future ownership of Edgeley Park.” But last May, he claimed: “I would never have sold the club to Mr Kennedy if I had known he would break our agreement by keeping the club separate from the rugby outfit.” Rather than create the Cheshire sports ‘family’ of Elwood’s (pipe)dreams, Kennedy “left County out in the cold, by taking the lease and (getting) the Trust to sign a suicidal agreement leaving them with little or no money with which to run the club.”

In 2005, the Trust said the deal would “put them in a position to … secure (the club’s) future as a self-funding business.” Much was made of their ten-year buy-back option on Edgeley Park and Cheshire Sports’ “six-year sponsorship agreement worth in excess of £750,000.” Less was made of the “agreements for Stockport County and Sale Sharks to share the revenues raised at the ground.” Last June, chairman David Hoyle admitted the Trust had “lacked sufficient finance from the beginning.” The revenue-sharing left County with too small a revenue-share. 30% of transfer income went to Kennedy. And County gave up considerable ‘conference and banqueting facilities’ profits, over £1m-per-year.

The transfer arrangement was designed to fund the buy-back option, and in the euphoria of actually gaining the option, the possible consequences were overlooked. Upwards of £1m went Kennedy’s way over the years, which forced the Trust/Club’s fatal move, borrowing £300,000 in July 2008 from stadium developers David Farms Ltd of Aylesbury. County’s then MD Mark Maguire, vilified by some fans for, he claimed “lifting cans of worms for any awkward debts/issues”, told the Trust’s AGM that the money was “simply to sustain the business for cash-flow,” an injudicious admission that the asset-free club was no “self-funding business.”

As 2008/09 developed, the club’s grave financial position fully emerged. Inevitably, there were unpaid taxes, and rumours of impending administration followed the board’s announcement that player sales in the January 2009 transfer window were a necessity. With the club’s desperation laid bare transfer income inevitably suffered. They received £650,000 during the window, But Maguire revealed: “£200,000 has gone to the Inland Revenue, who have been paid £500,000 in the last six weeks. But we still owe them £450,000 and there are other debtors we had to pay.” Such alarming news inspired two “private business consortia” to express interest in a club takeover. One was fronted by Labour peer and long-time Trust opponent Lord Peter Snape, who had been “offering to help” (trans: “take over from”) the Trust for years. “If the club had been run properly in the first place,” Snape grumbled, “we wouldn’t be in this mess… the Trust should relinquish ownership and the board should resign.”

Snape’s consortium included Elwood. The rival consortium was Maguire’s, who resigned as County MD, “because my position had become untenable,” he noted, correctly. “Since then, lots of things have been said about my handling of financial affairs,” he added. Right again. “I have put forward a credible business plan,” he concluded. In time-honoured fashion, club officials were denying that administration was an option. “We are not even thinking about it,” club chairman Martin Reid insisted on 25th March. He soon was. Two weeks later, David Farms Ltd asked for their £300,000 back

In a situation which repeated itself at Crystal Palace this year, the administration came just as the creditors were reportedly about to get their money. The club and trust boards had “shored up the position with money and payments to the Inland Revenue.” Maguire’s replacement was Sean Connelly. His time as Football Association of Ireland General Secretary saw them move “from cash-strapped to multi-millions” (although qualifying for two World Cups and a Euro may also have helped). But even he was powerless when the call came from Aylesbury. That one of the directors of the firm, Caroline David, was “working with one of the interested parties looking to purchase the club” was, I’m sure, a complete co-incidence. But it was nice to know that Snape would “be looking to pick up the pieces” if the club went into administration.

In March, the Revenue had granted County a two-week “stay of execution”, at the behest of local MP Ann Coffey, to come up with an acceptable tax repayment plan. County weren’t so lucky this time. And despite Kennedy’s much-reported best efforts and support, County entered administration on 30th April.
Joint administrators John Titley and Paul Reeves, from accountants Leonard Curtis, were quickly into action, too quickly for some. Within a week, popular manager Jim Gannon was a popular ex-manager. Gannon had been long-critical of the club’s financial management and, armed with his accountancy training, had produced a business plan in January which was at odds with, to pick an example purely at random, Maguire. His compulsory redundancy, especially as the manager’s post clearly wasn’t redundant, was seen by cynics as potential vengeance.

Within weeks, Leonard Curtis seemed to have their “preferred bidder.” From out of left-field came former Manchester City (and many other clubs’) striker Jim Melrose and a group of un-named backers. Other bids, including one involving the now-discredited Trust, fell by the wayside. The bid involving long-time Trust opponent Mary Gibbons supposedly went west when: “at the last minute (!!), the person we had approached to become MD looked at the figures and said there was a lot wrong with them.” And in mid-June Leonard Curtis announced principled agreement for the Melrose group takeover. All they had to do was agree Edgeley Park lease terms with the ever-helpful Kennedy and they were away. But within a fortnight, Cheshire Sports and Melrose were at public loggerheads over the (lack of) progress in negotiations.

Stockport’s creditors agreed a company voluntary arrangement to take the club out of administration, thanks to Kennedy writing-off all but 1p in the £ of the £3.8m the club still technically owed him. The Melrose consortium was unable to access this Kennedy generosity. For months on end, no progress whatsoever was reported on the issues of ground rent and which club would have priority use of Edgeley Park. Melrose’s people had been allowed to appoint the vastly-inexperienced Gary Ablett as manager. But with the club still in administration, Ablett’s inexperience made relegation a likelihood.

It soon became ritualistic for the proposed takeover to come before the Football League Board and for them to reject it, leaving the £395-per-hour administrators, and fans, reportedly bereft of concrete information. By February local council leader David Goddard was so exasperated that he reversed previously implacable opposition to “injecting large sums of public money” into County, claiming, poetically, “if the Melrose consortium goes away, this club will cease to be in May.” This farce played out until last month when the League’s excuse for not authorising the Melrose takeover was “a number of further queries about the proposed takeover (which) will be discussed in due course with the administrators and the proposed purchasers.” Quite what else they could ask wasn’t clear.

With credibility and patience beyond breaking point, a new group emerged to put takeover proposals before the relevant parties. The “2015 consortium” included all-too-familiar names such as Snape, Connelly and Gibbons and seemed to find favour with fans simply by not being the Melrose people, now largely dismissed as chancers. “All” the 2015 people have to do, it seems, is thrash out an agreement with the still ever-helpful Kennedy and the club will be saved (episode 94). But if the ever-helpful Kennedy doesn’t go all sports philanthropic with them, he might end up owning a ground with only his rugby team to play on it. The core issue of the problem with Kennedy’s ongoing involvement at the club starts to look a little more explicable.

It’s been twelve months since Stockport entered administration, months that County people will never get back, during which there were buyers, sellers and brokers for the club, yet it has been neither bought nor sold and remains as broken as ever. It’s a sorry mess encapsulating all that is bad about modern football off-the-field, with no respite provided by what’s happened on it. And no-one is innocent.

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    8 Comments

  1. A clear, concise and honest review of what is typical of the football world today. Fot those who had simply forgotten what has happened this summary puts you in the picture. Was a little worried about the ‘ever helpful Kennedy’ comments, it took them as sarcastic bearing mind his past!
    Kennedy has alot to prove, he is not a man of his word and his quick staff turn over during the past 6 years alone prooves that. He stated he wanted to buy Hibs a while back, Brian what stopped you, you could but out upteen football clubs!
    I still and probably never will as with 95%of County fans trust him or his long serving spokesman come puppet!
    Good luck 2015, and stay away others who are in their own little world for their own means, only they know who they are, if they can admit it one day!
    Well done Mark!

    Bob Jeffries

    April 15, 2010

  2. One can wonder why the Football League had absolutely nothing to say about a football club losing control of a football ground to a rugby club. Everything springs from that decision. Well, that and the fact that Ellwood ran the club with operating losses which he covered as debts, but wanted his money back.

    Dave

    April 15, 2010

  3. “Well, that and the fact that Ellwood ran the club with operating losses which he covered as debts, but wanted his money back.”

    Elwood bank rolled us! Yes, did it give us success? ‘yes’. With success it bred success for the relevant managers for whom Elwood believed in with purchases one could only have dreamed of when he took over (when we nearly went under).
    Danny bought some quality and had success.
    Jones did the same.
    Even Megson got us to our highest ever position.
    Kilner started off ‘on fire!’ but it went horribly wrong but Elwood still supported him with the likes of Kuqi, Wiss etc.
    Palmer was supported at the time with signings like Jones, Hardiker,Goodwin and of course Beckett! With Palmer is wasn’t going to work (especially when Murphy left)and it wasn’t meant to be.
    With all these playing in the Championship as it were, the wages were also high but bottom line is
    A) We didn’t owe the Bank or have any loans!!!!
    B) We played above the belt an enjoyed every minute of his realm.
    C) Good Managers and good players came and went along with the managers in some cases (Jones and Todd).
    D) He developed the stadium to an all seater with a nice big stand, scoreboard and conferences facilities to be proud of.
    E) Good or bad appointment he supported them and believed in them.
    F) Why give it away to a guy whose worth 232million at the time, when he could get back 3million for a club which had many assets let alone the stadium itself!!!
    G) He even believed Kennedy and Kennedy beleived the price was right, hence he agreed to pay back as and when, even with his wealth!

    Then,
    Kennedy decided to sell any assets he wanted to try and pay off Elwood, remember Kennedy was there for the rugby NOT football, so why give it to him, why not sell what we can now.

    We all forget what this guy (Elwood) did, it’s not his fault. The likes of Norman Beverley was quote ‘actively seeking a new owner!’ He and those who turn their backs on him didn’t know how lucky we were!!
    This had nothing to do with Elwood, The Trust including Marion and all his cronies who thought they knew it all with their banner (which makes my skin crawl) saying ‘now let’s do it!’ signed the club death warrant. They were advised NOT to sign it as Kennedy was selling them down a river and passing HIS personal debt to Elwood to the Trust!!
    That’s the start of a continuous decline along with others involved during the passed 2/3 years!
    Summary: The problems started from Kennedy onwards! and that includes all the deluded who believed in the Trust and it’s representatives especially the ones who walked around the pitch with the banner that day! YUK! FULL STOP

    Bob Jeffries

    April 15, 2010

  4. Elwood bankrolled us? If ‘bankrolled’ means getting us in a shedload of debt, losing us the ground and selling the training ground from beneath us, then, yes, he bankrolled us. Short-term success for medium-term ruin. Under Elwood we consistently lost £1.5-2m a season – even in the promotion season we lost £1.2m, despite getting to the League Cup semis. Elwood took all that money back and more. He was the one who seperated club and ground. There are, of course, others to blame – CS only wanted us for the ground, whilst the Trust – for all its good intentions – simply lacked the capital and governance infrastructure to succeed. I don’t think the Trust had enough support amongst the fanbase, either – it was simply too politicised. But our downward spiral started under Elwood, and for me it’s a disgrace he’s still in the Hall of Fame.

    scarf

    scarf

    April 19, 2010

  5. I suspect no-one is innocent applies to the vast majority of the club’s fans too.

    Bob, what did you do to help BTW?

    Martin

    April 20, 2010

  6. Great article. Very eloquently and clearly explains our predicament. I’m going to email the link to my non-County supporting friends so they have an accurate account of the mess the Club’s being dragged through.

    Stuart Poynton

    May 17, 2010

  7. Martin you’re wrong to ask Bob what he did, Bob is a fan like the majority of us and we were all led to believe things were gong well, there wass no need for us to step up to the plate. Scarf suggests Kennedy didn’t split the club and ground but they were as one when he bought and now they are split, simples!

    Paul

    May 17, 2010

  8. I wouldn’t deny the success Elwood brought but his perfectly legitimate exit was the catalyst of the downfall. Agreement or no agreement (and it was obviously not an agreement) we had lost the ground at that moment and as we’ve seen no amount of local big business brains can get double glazing Shark Kennedy to do anything other than what Kennedy wants. 2015 & Snape are fairing far worse than the fan owned Trust & Maguire. Twice in the past two years we’ve had idiots allowed to dictate our footballing policy without putting a penny into the club but I don’t blame Elwood, the Trust, Hoyle, Maguire or 2015 because it’s not their fault that Kennedy is Kennedy and we’ve no ground. Whoever comes in to run us next will be blighted by that fact unless they can get us a new stadium in cahoots with SMBC. It would be a bitter sweet day to leave EP.

    Nick

    November 8, 2011

Trackbacks/Pingbacks

  1. Terriers On Tour 2009/10….Stockport County | DATM downatthemac - [...] Stockport County went in to administration on April 30th 2009 and remain there to this day. For more information …
  2. Walking the walk or walking the plank? - Page 6 - RedPassion.co.uk - Wrexham - [...] to make a bid you have to see the books! Regarding the Stockport County Affair read this. …

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