Southend United & Fossett’s Folly

Southend United & Fossett’s Folly

By on Apr 22, 2010 in English League Football, Finance, Latest | 1 comment

Southend United were under threat of extinction thanks to a £400,000 Inland Revenue demand. Whilst their new ground at Fossett’s Farm is seen as the solution to the club’s long-term financial difficulties, the Shrimpers needed help in the short-term. They were fortunate that business partners were able to advance future revenue to cover the short-term costs and keep the club afloat for the time being. The consequences of this borrowing will probably be onerous, and will definitely have a detrimental effect on the promised financial advantages of the ground move. But that is for another day. Southend are saved. And with prudent financial management, the future is bright.

An accurate snapshot of Southend United’s fortunes… in November 1998. Naturally, given that Southend are right back where they were in 1998, when he came in, I come to bury Southend chairman and majority shareholder Ron Martin, not to praise him. His spin on the events at ‘his’ club this season has been as annoying as it has been disingenuous. His club have been exposed as serial late-payers of players and tax authorities alike; “a habitual defaulter” was how the latter described them in court. Progress on the new stadium at “Fossett’s Farm”, still the panacea for all the club’s financial ills, has been shunted and stunted by financial battles for which Martin and his club are getting blame from friends and foe alike. And, by the way, they’re about to be relegated, which could make Fossett’s Farm the biggest purpose-built stadium in League Two since Darlington’s ’George Reynolds Arena’, which needs no further comment.

It is possible to offer some mitigation. Not all the wounds to Fossett’s Farm have been self-inflicted. Problems have emerged from out of nowhere, ranging from Bronze Age burial sites to government minister Ruth Kelly – a haphazard collection of useless bones… and a Bronze Age burial site. And given that he has been wrong, not evil, down the years, there is an admirable quality to his persistence in the face of setbacks and, occasionally, reality. But Southend are in a mess, and are currently only alive thanks to the goodwill of others, most notably ‘supermarket giant’ Sainsbury’s, who have now bailed them out to the public tune of over TWO…AND…A…HALF…MILLION…POUNDS this season alone (it is believed Tesco are currently doing a roaring trade in Colchester).

Sainsbury’s paid the £2.135m HMRC were asking after last November. If Southend had been as “solid” as Martin claimed at the time, they wouldn’t have had any problems meeting this figure as it fell due and they could have walked it round to HMRC HQ, in Victoria Avenue…Southend. It is worth recalling Martin’s take on this very last minute bail-out. “The debt was paid by Roots Hall Ltd, which is one of my group companies.” This may have suggested that Martin had paid the bill. But Roots Hall Ltd received a substantial loan from Sainsbury’s on November 7th, the very day of that very last-minute reprieve, secured against well over a MILLION club shares. The events were thought to be connected. Martin had to admit as much in a more recent blog, noting that Sainsbury’s have no say in the running of the club, which may have disappointed his many critics among the Southend faithful.

While Sainsbury’s have taken over HMRC’s role as the club’s ‘bank’, Southend have been borrowing money elsewhere…and struggling to pay it back. The Shrimpers Trust subbed the club to the tune of sixty grand just before Christmas and had to extend the deadline for repayment to the end of April. The delay was “due to the ongoing implementation of working capital investments by Southend United which had taken longer than previously envisaged,” a gloriously credible-sounding piece of meaninglessness which the Trust had to accept, as “any demand for repayment” would “be unhelpful at this time” (trans: the club haven’t got the cash).

Not wanting to feel left out, the Professional Footballers Association subbed the Shrimpers a few quid too, another example of the remarkable situation whereby the union pays the wages because the management are skint. The loan gave Southend “time to conclude” those pesky “longer-term working capital requirements.” And Martin publicly demonstrated his gratitude thus: “These are not lowly paid players and they’ve always been paid in full. I know they haven’t always had precise dates for payments but they always knew the money would be coming”. “I know it wouldn’t have affected me had I been a player,” he concluded, breathtakingly. And I suppose it wouldn’t have affected him if Sainsbury’s had trolled into the High Court this week and said “the money’s coming but we don’t have a ‘precise date for payment.’ “?

Martin’s latest claim is that work on the stadium will start “in the summer” (he’s been promising fans “good news in May” for some time), with a view to playing in the stadium at or around Christmas 2011, by which time it might be vital for the facility to have an “A-grade” to allow it to play Blue Square Premier football. But Southend fans could be forgiven for thinking they’ve heard all this before. Because they have. Martin has been various shades of confident about the new ground since the turn of the century, confidence which doesn’t appear to have been shattered by some remarkable setbacks down the years.

In 2000, Martin justified the “sale and leaseback” arrangement over Roots Hall which had been necessary to deal with appalling 20th century debts, saying that: “The rent (a tidy £400,000-per-annum) will come out of then property enhancements we receive as part of our relocation plans at Fossett’s Farm, which will bring in substantial money for this club.” These plans were scuppered because “rival property developer” Lansbury actually owned three-quarters of the site, which somehow got overlooked during the alleged “planning” process. Early the following year, Martin was confident that new plans would get past the council, a confidence which unfortunately wasn’t shared by…the council, who “(did) not consider there is adequate information to put to members.”

It took some months for Martin to admit these plans had stalled, which rather annoyed Lansbury, who said the plans had been flung out months earlier and accused Martin of “continued misrepresentation of what is happening” – if you can imagine such a thing. Martin’s confidence unsurprisingly grew when he became club owner in 2006 and announced that work would a start on the 22,000-seater stadium that is still his (pipe)dream today. Original plans had been for a 15-16,000 stadium. But Southend were about to enter the giddy heights of Championship football and League Cup victory over an under-strength but still strong Manchester United. And Martin was “confident” that such a team would fill the stadium, claiming: “All new stadia attract people whether they are football fans or people who just want to see the new environment,” an odd statement which on closer examination suggests that he was confident that the team would fill the ground…er…once.

Nevertheless, he was confident that “we would see turnover double, even in year one.” About which he may be right, if we ever find out. And he’s confident now, despite disputes with some vital human components of the stadium plans. A “huge part” of the funding will come from Sainsbury’s development of the site of Southend’s current Roots Hall ground. For this, Sainsbury’s need the former site of Prospect College, a local vocational training centre. Martin announced in January that a deal was done. College Chief Executive Neil Bates said Sainsbury’s recently put that deal on hold for about the 94th time. Sainsbury’s gave no reason (perhaps the necessary funds were required elsewhere?) and Bates went public with his disaffection – for about the 94th time.

Martin has also been in lengthy negotiations with local shop and house/flat owners who have taken issue with the proverbial tuppence ha’penny he has offered them for their properties. But if anything else goes wrong, Martin will be confident that it will be someone else’s fault. His report on last week’s High Court appearance was far more about the Southend Echo’s “sensationalist” coverage, than Martin actually missing the court’s “final” deadline and only getting extra-extra time on a technicality. And the obsequious interview the paper published in response to Martin’s complaints was the usual mix of lame excuses, scattergun diversions of blame and variants on “everything is lovely.”

They may be no nearer to rocking up at Fossett’s Farm than ever. They may already have spent millions of the project’s funding and be in hock to just about everyone that knows them. And they may be facing Stevenage Borough for league points next season. But as he said: “We are very entrepreneurial and innovative… we have paid our debts. While I’m in charge, that will always be the case. And, in the fullness of time, I will deliver all of what I have said. If I was going to give up the fight for the club’s future, I would have done it long before now.”

We have been warned.

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    1 Comment

  1. Supermarkets could eat football for breakfast and this sort of nonsense is hardly surprising.

    Martin

    April 27, 2010

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