Time To Go: The Fight For The Future Of Sheffield Wednesday

By on Sep 29, 2010 in English League Football, Finance, Latest | 21 comments

A horse called “Owls FC” was due to run at Sedgefield racetrack this week. It didn’t. At first this seemed a very appropriate analogy for current affairs at Sheffield Wednesday – the “Owls.” But in reality it couldn’t be more inappropriate, as the Wednesday takeover tale keeps on running. A few days ago, the local papers that cover Wednesday in detail – Sheffield’s Star and Telegraph and the Yorkshire Post – ran the story that the takeover was “thought to be” a few days away. Now, a few days later…

Indeed, every time you allow yourself to think that Wednesday’s affairs couldn’t take on a more bizarre aspect, they do – in-fighting, out-fighting, shake-it-all-about-fighting and, this week, the real prospect of a Moody Blues revival. All sorts of poison has been injected into the affair by the recent publication of unratified minutes from a meeting held between Wednesday board members Nick Parker and Bob Grierson, chief executive and finance director respectively, and representatives of Wednesday’s long-standing Supporters Trust, Wednesday-ite. The meeting was held on July 8th. The date is significant.

The fact that the two sides were talking at all was unusual, historic relations between the sides have been frazzled for some years. But the focal point of the publication was the series of additional “notes” supplied by former Wednesday chairman, Lee Strafford, who resigned in May, after Wednesday’s relegation. Strafford’s key phrase, used four times, is “this is a lie.” And when he doesn’t introduce a comment in that manner, he uses the phrase “that’s an interesting thing to say”, which roughly translates as…er…”this is a lie.”

At the meeting, Wednesday-ite asked all the pertinent questions about Wednesday’s plight, on and off the pitch. The club had not only just been relegated but had also turned down the most transparent investment offer/takeover bid they’d received since they have supposedly been looking for such things (Chicago-based “investment firm” Club 9 Sports – see previous Wednesday articles). So the lack of investment was the natural focus of the questioning, i.e. why hasn’t there been any when “several clubs have received substantial investment in recent times?”

The focus of the answers was a mixture of “dunno” (“Bob Grierson says he genuinely doesn’t know why”) and “not our fault” (“it isn’t a case of blocking by board members or loan-note holders”). Grierson claimed “we haven’t had offers to reject,” which surprised those of us who’d trawled through Club 9’s…um…”offer.” And, he added, he “didn’t know why there isn’t a Sheffield person who has come forward,” which will have surprised “Sheffield” boxing promoter and “local personality” Dennis Hobson, who has “come forward” on a number of occasions over the years, only to be told to go back again. “Lee Strafford came with a potential investor but it didn’t happen,” Grierson is quoted as saying. “This is a lie” noted Strafford, sparing no words explaining why.

Strafford’s tenure as chairman, from January 2009 until May 2010, centred on a detailed business plan, which proposed a gradual turnaround of Wednesday’s finances on the back of a huge PR and rebranding exercise to make the club look attractive to potential investors. This was dismissed as mere cosmetics by some (me, for one), but was certainly a vast improvement on the club’s public relations over more recent years, as acknowledged by many fans. And it was the stage before actively seeking investment. “I did not come in with an investor,” Strafford noted, claiming he told Grierson in “September 2008” that “no-one is going to invest in something with such a poor recent public relations profile until they see it start to turn around.” Only once the business plan was up-and-running did Strafford “(find) four investors and tried to get them to do a deal.”

Grierson told Wednesday-ite that at the time the club was “cash neutral.” Strafford had disputed Grierson’s further claims that this cash neutrality was not dependent on “player sales and other exceptional income.” And, worse still, once Strafford and Nick Parker became chairman and chief executive, they “found that the club was not investor-ready and would not have passed a formal due diligence process.” In other words, a proper look at “the books” would have revealed the club’s “cash neutrality” claim to be “a lie.” Strafford used the phrase “not operationally clean” which translated as a “£1.5m hole in the accounts.” Parker told Wednesday-ite in July that he “did not recognise” the claim “at all” and added that “there was always a £1m-£1.5m buffer in the reserves (for) when targets were not achieved.” And he blamed Strafford for “putting expectations higher” and setting business plan targets which were not achieved.

Stafford, however, had the minutes of a January 2010 board meeting, which exposed Parker’s version of events. Grierson’s mantra has been “what goes on in the boardroom, stays in the boardroom.” Little wonder he thought like that when the minutes showed “Parker had concluded his forensic inspection of the club’s historical accounts following the discovery of the cash hole of £1m-£1.5m in November/December 2009” (my emphasis). “This is a huge issue,” noted Strafford, correctly, “as the business plan for running the club was based on false assumptions and all information given to the investors was based on the same false assumptions.”

Cynics may suggest that this was Strafford’s version of “not my fault,” as his plan’s targets were undeniably missed. But Strafford also published the “November 2008 Investment Financials” and other 2009 budgetary documentation which (a) are as interesting as they sound but (b) explain the points he made, if you’ve got a spare fine tooth-comb. Strafford disputed further claims. Parker said improvements in Wednesday’s financials under Strafford were “totally due to TV revenue.” Strafford noted a £1.8m increase in TV revenue alongside a £3.8m growth in overall revenue. “This is the first material growth in revenue not driven by TV money since 2002. Why the lie?”

Grierson, meanwhile moves his stance from “not my fault” to “it wasn’t my job,” claiming: “Prior to Lee’s appointment, I worked on the finances – the budget, the cash flow, liaising with the bank. I haven’t done much of that in the last year, Lee took that on.” Strafford noted that such changes in directorial responsibilities would have required a formal announcement as Wednesday is a PLC. And Strafford again had the details to show that Grierson’s recall of his responsibilities was, shall we say for legality’s sake, less than total.

Strafford’s technical points about the past were good ones, well made. But the weaknesses in Wednesday’s board were even better sum up by two briefer aspects of he minutes. When asked “do the directors need to be more visible?” Grierson casually responded: “I don’t think people are interested in what the directors are doing.” And he must have said this out loud, because it’s in the minutes. As proof of how out of touch Grierson is, that can’t be bettered. But what is not in the minutes is maybe most telling.  The meeting was held on July 8th. Fifteen days later, HM Revenue and Customs issued a winding-up petition against Sheffield Wednesday PLC, over £1.1m in unpaid taxes.

So this debt was either accrued in a fortnight, or it was as big a shock to the board as to anyone else, in which case the board stand condemned of financial negligence on an indefensible scale. Or they were simply not giving Wednesday-ite a full and true picture of the financial situation, exactly Strafford’s claims over the aforementioned – and similarly-sized – “£1.1m-$1.5m “hole in the accounts.” Either way, the board come out of this as unworthy of being directors. It is, you could say, time for them to go. And an increasing, and increasingly well-organised, group of Wednesday fans are doing just that. Down through the years of turmoil, the Wednesday-ite supporters’ trust have largely tried a diplomatic route of representing fans’ interests. Occasionally, this has led to some very undiplomatic decisions, such as backing a Ken Bates takeover (that undiplomatic).

But their willingness to use their 10% shareholding in a positive manner has garnered less credit than it has deserved. And the desire to have such a dialogue with the board as happened on July 8th was also, largely, a “good thing.” Unfortunately, the latter has revealed how necessary protest groups such as “Time to Go” (TTG) have become. TTG have focused their anger on the three longest-standing board members, Ken Cooke, Geoff Hulley and, naturally, Grierson. They have exonerated current chairman Howard Wilkinson, whose long-standing Wednesday affiliation makes him a figure around whom to unite (exactly what a chairman should be, in fact), and Parker, despite his failing powers of recognition when it comes to million-pound accounts black holes.

The campaign is well-reasoned and well-focused, despite a false start after a last weekend’s home defeat to Southampton which saw some misdirect their ire at Wilkinson. A pithy 10-page document entitled “The rise and fall of Sheffield Wednesday, 1991 to 2010” neatly encapsulates what has gone wrong and when, and a very useful education for outsiders.

The website (http://www.timetogoprotest.co.uk) contains a number of campaigning ideas, the best of which is inspired by the facebook campaign which subverted the race for the Christmas number one single last December. TTG have suggested a co-ordinated purchase of the old ‘Moody Blues’ single, ‘Go Now’ to get it top of the national singles chart and give their campaign about the best national attention it could muster, especially at 79p per single. Wilkinson’s brave and admirable response to the misdirected abuse he got after the Southampton game included the dire warning that the club “would be in receivership next week…if Nick and I walk away,” which, if you think about it, is the ultimate indictment other board members, such as Cooke, Hulley and Grierson.

Yet TTG has the crucial quality of being “for” something rather than just being “sack the board” merchants. They, and Wednesday-ite, have latched onto recent attempts, spearheaded by local MP and genuine Owls fan David Blunkett MP to organise backing for Wilkinson and Parker, with the call going out for “21st century business acumen, strong leadership and good old cash.” But whatever the next step is, it has to be quick (“we’re that close,” Wilkinson claimed this week). The team’s bright start to the season is already a fast-fading memory, they dropped to 16th in League One while I typed this. The Co-Operative Bank’s £800,000 company bail-out last month can hardly be a regular feature. And Cooke, Hulley and Grierson’s unwillingness to depart is as damaging as Tom Hicks’ similarly grim efforts at Liverpool.

As TTG concluded in their inaugural rallying cry: “For the directors of Sheffield Wednesday Football Club who have overseen the decline from Cup finalists to the third tier, and the brink of financial ruin, it is TIME TO GO.”

Share Button

    21 Comments

  1. Strafford’s tenure should be subject to scrutiny also. During that time money was spent unnecessarily on the world cup bid and compensation to a kit manufacturer for terminating their contract early. The commencement of the sale of season tickets in 2009 for the 2010 season also suggests that the club had serious cash flow problems.

    I don’t share your confidence in Wednesdayite – for me their collaboration with Ken Bates without consulting their membership was a big deal and I refuse to support them to this day.

    It’s now a case of waitng for the Co-op to pull the plug as nobody would be mad enough to invest in the current basket case. I’ve no idea where the club goes from here but it won’t be pretty.

    Ken

    September 29, 2010

  2. Really interesting and well-researched piece. If some of these directors cared for the financial health of their clubs as much as supporters like you do – and didn’t shelter behind the arrogant “what do supporters know about finances?” attitude – then the whole game would be far more healthy.

    urzz1871

    September 29, 2010

  3. Wednedayite / Owlstrust at the time never supported Bates per se What they did support was the right for him to find out the true state of the clubs finances , 8 years later the remaining board members are still lieing about the finances at the club as was highlighted in the excellent article .UTO – WTID – TTG _ Wednesdayite

    We are all Wednesday arnt we ?

    Ben

    September 29, 2010

  4. Excellent article. Sums the mess up at our club perfectly.

    Dan

    September 29, 2010

  5. A good piece, but behind the times even as it was being written. Strafford’s era is over, and any of his ramblings on Owlstalk and elsewhere lend more credence to the belief that he is an individual ruled equally by ability and paranoia. Forget him.

    Current reality, and the anachronism that Time To Go already represents, is that the 3 Stooges may well, in effect, be long gone. The inference to be taken from the comments made by Wilkinson in his impromptu meeting with fans at Hillsborough last week suggest that the Co-Op Bank (bless ‘em) may well have bailed out the club on the basis that “Casio Bob” Grierson take even more of a back seat, along with the other 2, and leave the running of the club to the bank, Wilkinson and Parker. Unofficial admin, you might say.

    That in no way detracts from the veracity of Strafford’s claim about Grierson’s laxity, which to use Straffordian parlance, seems to not be a lie.

    What I would also point out is that there are other players in the game who deserve a mention, not least WTID (“Wednesday ‘Til I Die”, http://www.wtidgroup.co.uk) who have been working to prepare an investment model, that, whilst it might be way too late since official administration can only now be weeks away, shows that at least some fans have both the community and the future of the club at heart; two issues that go way beyond the petty bickering of Strafford, Grierson and the rest, in spite of their claims.

    Time To Go is not good enough. It’s a negative stance, and that’s something that has been the virtual ruin of Sheffield Wednesday for nigh on 15 years. Bickering, power-seeking, paranoia and obfuscation is what constitute the recent Wednesday Way, and any putative investor has that legacy to confront, along with financial books that are something that (allegedly, of course) could be entered for the Booker Prize.

    If Chris Turner is that man, as the Yorkshire Post suggests, this will bring no peace. He failed as a manager at Hillsborough, and has been closely linked with the unlamented previous chairman, Dave Allen, whose hatred of Wednedayite was evident. His consortium’s money will be well received: he I would hazard a guess will not.

    If there are potential investors out there, still interested in investing in a duck as lame as this one, they need to start to consider very carefully how to overcome the Wednesday Way of bickering, power-seeking, paranoia and obfuscation, and start building bridges.

    I have some advice here.

    Ask the fans to stump up their money in return for a say. having got too close, sane investors shy away from SWFC, like mutually repelling poles of a magnet.

    It’s time for such madness at Hillsborough to stop, and to ask the only people insane enough to do so to dig deep for the Owls.

    The fans.

    Nobbly Style

    September 29, 2010

  6. Excellent article. “Time To Go” might just be the group that the divided fanbase manages to rally round. Wednesdayite are, rightly or wrongly, tarnished by their association with the Ken Bates takeover attempt of 2004.

    Also, Parker was reported in the Yorkshire Post on Tuesday as saying “The Co-Operative Bank own and run this club” – so any takeover and significant change at the top will have to meet with their approval.

    Richard

    September 29, 2010

  7. Excellent article. However, with the exception of a vanity investor, who is gonna put money into Owls with a £30 million debt when this will be gone after Administration? Also, most of this debt is secured against the stadium and training ground, with a current but historical book value of £25 million. Following property- market crash and failed planning applications for housing and a supermarket, these tangible assets are now worth about £8 million (based on recent sale of more valuable Selhurst Park). You’d have to be clinically insane to give us funds. But like Palace, Leeds and Leicester, investment will quickly follow administration.

    Marco

    September 29, 2010

  8. Excellent article. Cheers.

    Personally I’m so disillusioned these days that I’m actually almost looking forward to the day that club collapses and is reformed as some form of “AFC Wednesday” somewhere way down the pyramid. It would be good to have a football team I could actually support again

    ad hoc

    September 29, 2010

  9. Surely receivership/ administration is the only solution? If you were a potential buyer right now, and you know what we think that we know, you would be hoping for receivership. At that point, you can negotiate dirtectly with the adminstrator and the debt and the loan notes will be negotiable. Why pay for the club now when you can buy it tomorrow for less. This has been the issue for a very long time. Hence no deal.

    Without the Co-op debt and the loan notes and with 23,000+ fans per week do you not have a 20m gbp revenue company?

    And a 20m gbp revenue company with none or very little debt can certainly fund a 10m gbp wage bill, which is championship promotion standards.

    So why are we so scared of admin? I heard Howard Wilkinson say that he was all that was standing between the current PLC and admin. I think someone should have said, is not the current PLC the walking wounded and would we not be better off in admin?

    We would be decuted 10 points but we would be paying pennies in the pound to the Bank and the loan note holders, right? And the new PLC would be healthily funded with a new board – with or without HW – their choice.

    Anyway – if i were a buyer, i would have waited to see if we got relegated last year, like Club 9 did, and right now i would be waiting to see if we go into admin. Anything else is just more of the same – a long slow death of the current PLC which is like a man treadwatering in a storm but running out of energy. SWFC has the burden of not too much debt to tip them completely over and too much to go forward, but we seem to be moving to the tipping point.

    My point is that the tipping point may not be that bad a place.

    jeremy

    September 29, 2010

  10. Wigan was a pier, with a riccerty stand
    Blackpool, Stoke. Blackburn being cash cowed by an asian businessman, all sparsly supported clubs with investment . whilst we see these clubs knock our great club down the pecking order, so depressing

    timberland

    September 29, 2010

  11. “So why are we so scared of admin?”

    1) Because it’s wrong to piss away millions of pounds and expect someone else to pay for it.

    2) Because we’ll lose control the stadium.

    3) Because’ll have to sell players at a knock down price.

    4) Because we’ll go bottom of the division.

    I’m sure there are more.

    Ken

    September 29, 2010

  12. Personally I’m so disillusioned these days that I’m actually almost looking forward to the day that club collapses and is reformed as some form of “AFC Wednesday” somewhere way down the pyramid. It would be good to have a football team I could actually support again
    —————————————–

    So I am not the only one then? Playing at a lower level in the 70′s, in the 00′s and again now was and is actually not that bad in itself.

    Sure, we all want Wednesday to be a successful team and compete at the top like we did in the 90′s but – and I’m sure some will dispute this – many people just want to watch their team compete on a level playing field, have an opportunity to succeed from time to time, and be proud of who they support at whatever level. Having a day out at a smaller ground with a good atmosphere is as enjoyable a way of watching Wednesday as any. Watching the club flounder under massive debts that it cannot get out from under is not.

    The club is clearly in its death throes as an existing entity. Painful though it will be in the shorter term, let’s just get it over with, start again, build again and get this debt and the current board off our backs once and for all. It may take ten years at least for Wednesday to rebuild, but it has already been that since the current trouble began and there is clearly no sign of it ending.

    NH_Owl

    September 29, 2010

  13. I’m surprised the article doesn’t comment on how an combination of wednesdayite’s attitude, supporters abuse and the boards unprofessionalism led that led to the former chairman Dave Allen quitting to take over the mantle at Chesterfield, where he’s invested £7m (£4m for 80% shareholding + £3m in loans) This was the turning point in Wednesday’s fortunes as internal investment dried up, relegation soon followed.

    Had Allen not been driven away Wednesday would not be in this position

    billy

    September 29, 2010

  14. In response to Ken’s comment about admin – i am sorry Ken, but i think that you might reveal the very issue. Noone has really thought the implications through from a financial perspective, a PLC view, not a football view.

    Dealing with your points.

    1. Wrong to waste millions of pounds? Risk/return. Someone risked, they failed. The old PLC is not functioning well, wind it up and set up a newco. It is the capitalist way. The PLC is a capitalist venture, it follows those rules. I would care if it were my money, and that is what the current directors care about. However, as a supporter, i support the team, NOT the current PLC.

    2. Lose the stadium? the co-op bank will have written down it’s loan to SWFC PLC, as it will have written down the value of the asset – the stadium. However, it is still telling the PLC that it wants to be repaid in full. The admin process would force reality on the situation. The debt and the asset re-price and we start all over. They could, theoretically sell the stadium to a developer? Those days are over. Better to deal with the new SWFC. So, unlikely to lose the stadium. Who would buy it?

    3. Sell players at a knock down price. No. Suddenly the new PLC will be flush with cash and recapitalised. No need to raise cash, the process of administration de-gears the PLC. It is the whole point.

    4. Go to the bottom of the division? Where are we now? Struggling with no prospects, strong enough to delay our death, but not strong enough to go forward, capable only of below average football. I’ll take the bottom of the division with less debt and a new PLC over where we are. Go one step backward for financial freedom.

    I guess that the issue is that you need to be dispassionate about the PLC administration. It will be good for football at hillsborough and that is what i really care about. Not whether the loan notes or the bank get repaid. I just want to watch good entertaining football instead of the slow dance of death that we have had since 1999-2000.

    jeremy

    September 30, 2010

  15. It’s not just about the bank or Dave Allen getting paid though is it? It’s all the other people the club owe money to. No idea who they all are, but are likely to include contractors, caterers, the Sally Army, stewarding organisations, etc etc. I couldn’t care less if Dave Allen doesn’t get his money back, but if the club goes into admin, there will be a lot of honest hard-working people who will possibly be themselves forced out of business through no fault of their own.

    None of this stuff happens in isolation

    ad hoc

    September 30, 2010

  16. Jeremy, you seem to be suggesting that admin is some sort of panacea after which we will be miraculously debt free. I’m not so sure. ‘Flush with cash’? That’s Alice in Wonderland stuff. Note that I said ‘lose control’ of the stadium – the bank would own it and could either rent it back to us or sell on to a 3rd party, neither being good scenarios.

    Billy, Dave Allen’s weakness was his inability to deal with people having different opinions to his own, a basic requirement of a football club owner. He has total control of Chesterfield which suits his style.

    Ken

    September 30, 2010

  17. Jeremy, Yes he was weak on the PR front, but I’d venture to suggest hindsight have shown his opinions were right, this is the problem at Wednesday too many stakeholders wanting a say.

    Yes he has total control of Chesterfield, but watch them fly under his leadership

    billy

    September 30, 2010

  18. Sorry meant Ken not Jeremy

    billy

    September 30, 2010

  19. Re the clubs statement on administration today:

    The club might not be right on this point. The cash required to obtain control of the club may not be different whether the club is the same PLC as today or a new PLC coming out of administration. However, and this is key, “the large write off suffered by the Bank” would be a write off of the liability of SWFC to it’s creditors. The same would be true of the Director’s loan notes, ie they would be “Written off”.

    So let’s think about this? An SWFC controlled by a new PLC with lower liablities is an SWFC that can spend more on players. More better players is bad for the fans in what way?

    The massive costs involved do not compare to the massive savings to SWFC of the large debt write off.

    Loss of goodwill? With whom? As a fan i care about the quality of the football at Hillsborough, period, end of story. Get me good football.

    The Directors are correctly supporting the interests of the current PLC and it’s creditors, which is 100% their job. However i am not sure that it is correct to align their interests with those of the football club and the fans. Don’t we simply want more money spent on better players so that we can be entertained?

    jeremy

    September 30, 2010

  20. Isn’t spending loads of money on players to give you the football you believe you so richly deserve the reason you are where you are Jezza?

    Mick Nick

    October 1, 2010

  21. Somebody likes swank and expect when tranfers made everythink would be ok.Football is not only spending money ıt also living organisition.

    Fantasy football

    October 4, 2010

Trackbacks/Pingbacks

  1. Time to Go - [...] more of this on “Two Hundred Percent” – a good article which goes on to talk about Time to …

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>