Spring is in the air, and since it is the start of a new season, it must be time for a new financial crisis at Weymouth Football Club. The club was relegated from the Blue Square Premier at the end of last season and is already adrift at the bottom of the Blue Square South and facing relegation for the second season in a row. According to a report in this morning’s Non-League Paper, the club’s debt is now believed to be at around the £1m mark, and it is being reported that if a CVA cannot be agreed then the club will be liquidated. Yet again – the last time was in October – The Terras are said to be on the brink of closing.
Regular readers of the site will be aware of Weymouth’s predicament. The club was been serially mismanaged since hotelier Martyn Harrison overspent on getting the club into the BSP in the first place and, last autumn, they took on the former Cambridge United chairman as the latest incumbent for the poisoned chalice of the chairmanship of Weymouth Football Club. The team has struggled along, bumping along the bottom of the Blue Square South and sliding further and further from the others in the pack at the bottom of the table. Rolls states that the club’s total debt is now over £900,000 and that he has sought professional advice from insolvency practitioners that have advised him to seek a Company Voluntary Arrangement with the club’s creditors.
This being Weymouth, of course, a financial crisis wouldn’t be a financial crisis without a bit of back-biting from former club directors, and this crisis is no exception. Rolls has claimed that former directors of the club hid the full extent of Weymouth’s debts from him – although, it has to be said, anyone getting involved with Weymouth Football Club would surely be aware of the club’s recent history and that nothing at The Wessex Stadium is ever likely to be as straightforward as it might seem – and two of those former directors have made comments which seem to imply that something about the club’s current financial situation doesn’t quite add up.
There is a hell of a lot of money owed to businesses in Cambridge and people with Lithuanian connections. Hopefully, come the meeting, everyone will be able to justify their claims. I can see that the creditors’ list is not complete and I’m concerned at that. I can think of four or five people that are owed money and have been for a long time.
This is a serious allegation to make. George Rolls has financial interests in Cambridge and Lithuania, so the thinly-veiled allegation that seems to be being made here is that there are irregularities in the financial paperwork that is to be put to the club’s creditors to approve – or otherwise – a CVA. The eagle-eyed amongst you may also have noticed that one word has been missing from all of this talk so far – administration. It is legally possible to reach an agreement with creditors without entering into administration, but the fact that the club is seeking not to enter administration is something of a curiosity if it is insolvent.
The concern of some Weymouth supporters is that agreeing a CVA without the club entering into administration will mean that any irregularities in the club’s books will not be seriously examined. Creditors concerned about what is being pushed forward would have the right to try and force the club into administration so that a full investigation could be carried out, although this may mean the liquidation of the club and this in turn would mean that they would most likely not see any of the money that they are owed being paid back.
What is interesting about the current rate at which the Weymouth debt is rising, however, is the affect that it has on the club’s single biggest creditor, former chairman Malcolm Curtis. As things stand, Curtis would be likely on his own to have a blocking vote on any proposed CVA and a couple of the club’s other creditors (such as HMRC) would be likely to vote against any CVA proposal. If the stated debt gets high enough, however, Curtis’ debt would become smaller as a proportion of the total amount owed by the club. To put it another way, the benign power that Curtis hold over the club will diluted if the club’s debt continues to increase.
At the time that Rolls took the club over, the debt at The Wessex Stadium was said to be around £550,000. Did he think, in all honesty, that a club in a position as enfeebled as the one that Weymouth have been over the last year or so, had any chance of even breaking even on a trading basis, let alone making inroads into reducing the capital of their existing debts? A CVA would be likely to reduce the level of the club’s debts by anything up to 90% and give them a five year security blanket in which to pay this amount off, but there is at present nothing like a guarantee that the club can continue to trade solvently.
Meanwhile, the list of the club’s creditors that has been released by the club itself makes for depressing reading, and indicates the extent to which Weymouth have been leading other local businesses a merry dance over the last couple of years ago. It is worth considering that whilst considering that the club’s biggest investors are one issue, small local businesses and individuals will, in the event of a CVA being agreed, be railroaded into losing money that they can ill afford to lose. Anande Gankande, a former club doctor, is owed £525.00. C & O Tractors are owed £1,556.83. The Dorset Cake Company is owed £379.65. Wey Valley School is owed £228.00. These people and companies are the other losers of Weymouth’s mismanagement – individuals and small businesses that have done nothing wrong other than trust a football club to repay a debt that it owes. Weymouth Football Club hasn’t even been paying its television licence.
Crowds at The Wessex Stadium are down to a core of a few hundred, and this is not enough people to dig the club out of the whole that it finds itself in yet again. Even if a CVA is agreed, it seems unlikely that the club will not be back in some sort of scrape in six months or so’s time, and relegation from the Blue Square South into the Southern League seems certain at the end of this season, even if they manage to avoid some sort of points deduction over their financial condition. Every time the put-upon supporters of the club have dared to hope that new owners will come into The Wessex Stadium and sweep it clean, something has happened which has only pushed the club closer to the precipice. It is starting to feel as if the end of the club is the only way that this particularly enduring soap opera is going to end.