AFC Bournemouth overcame a seventeen point deduction to stay in League Two but, as Mark Murphy writes, their problems didn’t finish there.
It could be argued that the greatest condemnation of the Football League’s “Fit and Proper Person” test was that Ken Bates could pass it. This, however, may no longer be the case – not because of anything Bates himself has done, but because of the serial mismanagement of AFC Bournemouth’s affairs last season – which has emerged from the Football League’s explanation for maintaining the strictest possible transfer embargo on the South Coast club. Current Bournemouth chairman Eddie Mitchell issued a statement three days after meeting league officials at their Preston HQ this week to discuss the embargo’s future. While Notts County can add the equivalent of a small country’s Gross Domestic Product to their salary bill apparently without breaching League Two’s salary cap, Bournemouth cannot currently even loan a player from another club. Football League regulations allow these two contrasting circumstances to apply, despite what is supposed to be a ‘level playing field’ because of the mismanagement skills of gentlemen called Alastair Saverimutto and Paul Baker.
Sol Campbell’s £40,000-per-week keeps Notts’ salary bill below 60% of turnover because their new owners, Middle East consortium Munto Finance, are paying Campbell’s wages outside of the club’s actual turnover, even though the financiers behind Munto are yet to be ratified as ‘fit and proper’ by the Football League, which is a situation to watch in itself. Mitchell’s statement neatly sums up why the League is being so draconian in their case, why the 17-point deduction that they overcame last season (for which 31-year-old boss Eddie Howe could easily have been named Manager of the Year in League Two) hadn’t “brought (the club) into line”. He explained: “During last season, Bournemouth accumulated £1m debt by living beyond its means yet again…the club was mismanaged considerably,” – an understatement, as we were soon to discover.
“Two managers went and, despite agreements, compensation is still outstanding…tax was not paid to the tune of £400,000…rent on the stadium wasn’t paid – in fact, a great deal of creditors weren’t paid. So, where did the revenue go? It appears, down the drain”. Though, that apart, it was difficult to see what Saverimutto and Baker had done wrong. Jeff Mostyn, former chairman and current director, has a right to feel awkward. He had roles in Bournemouth entering administration and the need for “new investment” last summer and, in introducing Liverpool-based sports ‘marketeers’, Sport-6, Saverimutto and Baker, as that new investment.
New chief executive Saverimutto had been quite good at rugby but less successful at directing Everton’s commercial activities – the Merseysiders outsourcing the operation soon after he left. Co-owner Baker was a Chester City fan – Sport-6 were on the exhaustive list of failed bidders for Steven Vaughan’s allegedly for-sale club. Together, Saverimutto and Baker took over Bournemouth as they exited administration last close season but such was their incompetence from almost day one that it was very nearly Bournemouth’s last close season of all. They promised a “seven-figure” investment, supplemented by various “out-of-the-box” fund-raising initiatives, which turned out to raise little more than a series of winding-up petitions.
Sport-6’s money ran out by about Christmas and the credit crunch took its share of the blame. Their investment was due to come from the proceeds of the sale of one of Baker’s other companies, which fell through. However, their excuses for other failings were rarely above the “dog ate my homework” standard you’d expect from a naughty but unimaginative eight-year-old. “Media manipulation” got a run out, and Saverimutto cited a “depth of badness outside the inner sanctum of Bournemouth” for Sport-6’s increasingly negative press. The reality was, of course, Sport-6 spending money they didn’t have; despite the debts they’d inherited and had yet to clear – the wage bill was “in the top six” in the division, according to Mitchell’s statement. Aside from the almost monotonous regularity of winding-up petitions, including one from a company involved in Saverimutto’s very first money-making scheme, HMRC even sent their bailiffs to Bournemouth’s club shop to confiscate stock.
Baker tried to sell his 50% stake in Bournemouth straight after Christmas. The full facts of what became a very convoluted affair have yet to fully emerge, but what did emerge was the extent of Bournemouth’s financial shortcomings. Local philanthropist and charity foundation owner Adam Murry was the major interested party, but the more due diligence he undertook, the more financial skeletons he found. In April, Baker publicly accused Murry of reneging on share sale agreements. Murry, however responded in kind: “We had no choice but to review agreements made, in principle, and make an offer that reflects the liabilities going forward.” These were the liabilities Mitchell listed last week.
After another winding-up petition was adjourned from mid-May to July 13th, Murry finally got a consortium to make Baker accept an offer, give-or-take the odd legal wrangle (another chapter for the book – involving Saverimutto, who had resigned his chief executive post in March). Mitchell quickly became the focus of the ‘Murry Group’, taking over as chairman once he’d divested himself of his controlling interest in and chairmanship of Blue Square South Dorchester Town to his sons in order to avoid breaching conflict of interest regulations, although whether Mitchell could be described as a knight in shining armour is also open to question – he had previously spoken of a desire to merge Dorchester with local rivals Weymouth when both clubs were in financial trouble last year.
It wasn’t until this week in Preston, though, that it really dawned on Mitchell and others what they’d let themselves in for. His statement said: “We were told in a forceful manner that Bournemouth should start living within its means and face up to its responsibilities”. In order to assist with this process, the League require Bournemouth to “show constantly improving monthly accounts, meet all football creditors’ debts and pay outstanding taxes while meeting on-going commitments.” In other words, be the best-run professional football club in the country at the moment, by some distance. And there was more. “If, over a period of some months, we can achieve this,” reported Mitchell, “they would consider dropping us down to a lower level of embargo”.
Mitchell then listed the impressive amount of work the new board had already done to pay Sport-6’s debts, including “clearing a number of court judgements”, and there was one more sting in the tail, with Mitchell adding that, “I also feel it prudent to let supporters know that we paid a very considerable amount of money to previous owners to stop the club going back into administration and losing its Football League status”. These payments were thought to include money owed to Mostyn by Sport-6 as part of their takeover deal last summer. Mitchell concluded: “Without (the new board) stepping in when we did, the football club, on July 13th 2009, would have been wound up in court, and that’s the truth”. It’s a truth should bother football’s authorities far more than it apparently does. Should, heaven forbid, Saverimutto or Baker want to run another football club, there is nothing in any ‘fit and proper persons’ regulations to stop them. Until regulations are tightened to prevent clubs like Bournemouth from lurching from crisis to crisis, these situations are unavoidable.