Midlands Week – Birmingham City: Still a Mess of the Blues
This is a club which hadn’t been in a very good position even before the current pandemic kicked in. Now, with the financial costs of having to close their doors for a year having been ruinous for just about everybody, this particular club seems even less likely to be able to face the challenges of the post-pandemic world than most others. The harshest criticism that one could make of Karanka is that he was a symptom rather than a cause of the club’s dismal season.
It’s arguably more likely, though, given that chaos seems to have somehow worked its way into the club’s DNA, that Karanka wasn’t even a symptom of their ills. Rotting from the head down, could any manager – that realistically would have been interested in going to St Andrews in the first place – have been able to make sense of this basket case of a club, this season?
It’s been a decade since Birmingham City were last a Premier League club, but after finishing in fourth place in the Championship and losing to Blackpool in the semi-finals of the play-offs, they’ve seldom troubled the top end of the table since. By the time of their relegation, Carson Yeung had been owner of the club for just over a year and a half, just enough time to allow his Midas-in-reverse influence on the club to start to become apparent. The Blues won the League Cup in the year of their relegation, but supporters hoping that the relegation which followed it would turn out to be a mere clip ended up disappointed.
In truth, the alarm bells about Yeung had been ringing since he first became involved in the club in 2007. Having acquired a 29.9% shareholding in the club in August of that year, Yeung failed to deliver the money to complete the takeover by the of November deadline, leading to the bid falling through altogether. Two years later, though, with the club having just been promoted back to the Premier League – they’d been bouncing between the two divisions for the previous four years – Yeung completed his purchase, but already questions were being asked about how Yeung made his fortune, and whether he might actually have been little more than a frontman for other, more secretive, investors.
At the end of June 2011, Yeung was arrested in Hong Kong on suspicion of money laundering. He had to post substantial bail to leave the island to return to Birmingham in the first place, but did return for a trial which lasted a year, from March 2013 on. In March 2014, Yeung was convicted on five counts of money laundering a total of HK$720 million, and was sentenced to six years’ imprisonment. With his position at St Andrews untenable, he’d already left his position within the club, and ownership of its holding company, Birmingham International Holdings, passed to a company called Trillion Trophy Asia in 2016.
Since 2016, the club has undertaken hit after hit on the financial front, whilst performance on the pitch has completely stagnated, all coming under ownership which shows little indication of how to control its costs or invest money properly. Karanka’s replacement will be Birmingham’s eighth in the four and half years since they took control, and they’ve also overseen financial incontinence on a grand scale over this period of time.
By the end of 2018, the club’s wages-to-turnover ratio was 139%, and it was all the more remarkable that even this absurd figure was a reduction from the previously reported 202%. In March 2019, to the surprise of nobody, Birmingham were deducted nine points for failing to keep to EFL Profit & Sustainability rules which limit Championship clubs to losses of ‘only’ £13m per year. They were the first to do so.
By this time, the rumours coming from within the club were almost entirely toxic. There were reports of a culture combining the worst aspects of a bullying culture and, apparently, almost complete ingorance of how football even works. The club’s ground was sold to a holding company called Birmingham City Stadium Ltd for £22.8m and leased back at a cost of £1.25m a year, meaning that it will take just fourteen years for any perceived ‘profit’ from the sale to disappear altogether. All of this happened with the club’s Supporters Trust having applied for (and awarded) Asset of Community Value status for it in 2013.
The club’s approach towards the appointment of managers has ranged from the unlucky to the bizarre. Appointments such as Garry Monk, Steve Cotterill and Pep Clotet didn’t work out – how could they, against such a backdrop? – by they did at least make some form of logical sense. On the other hand, though, amongst the managers brought in by owners who didn’t know what they were doing to a club in a highly parlous financial state was… Harry Redknapp. The independent panel investigated the club’s SCMP breaches later heard that the club had spent more than £31m on players in the two transfer windows under Zola and Redknapp. More than once over the last few years, Birmingham City have looked like the script for a movie about a badly-run football club which has been rejected for being too unrealistic.
Elsewhere, there was routine talk of interference in team affairs from above that bordered on the bizarre. On one occasion, when a player pulled a hamstring, one of club’s senior management told a coach that they should be able to see such an injury coming and stop it. On another occasion, a coach was asked after a win why Birmingham didn’t win the match 8-0. In March 2018, the Mail reported that Xuandong Ren flew into a rage and smashed glasses in a private room at St Andrews after a defeat. Ren is one of the three members of the club’s senior management who have been described as “three Football Manager wannabees.”
Against such a chaotic backdrop, it’s a minor miracle that the club’s revolving door of managers has even been able to keep the club in the Championship. Birmingham City, however, haven’t finished above 17th place in the table since 2016. For all of that, though, it isn’t as though the club hasn’t been without opportunity to stabilise its financial position. Che Adams was sold to Southampton for £15m. Teenage sensation Jude Bellingham went to Borussia Dortmund for almost twice that amount.
The ground sale may not have secured the club’s financial position, but at least it didn’t land them in the hot water in which Sheffield Wednesday found themselves over theirs, whilst their ground-share agreement with Coventry City (which will now be coming to an end) is worth money to the club, though some would argue that would trade-off would be worthwhile, considering its condition in recent seasons. Published accounts at the end of 2019 showed a loss of £6.5m, which was, when multiplied over a three year period, exactly the amount of money that clubs are allowed to lose under current SCMP rules. And Covid-19 has, of course, given the owners of the club the perfect excuse to mask the obvious gaping holes in the way it’s been run.
Things haven’t gone their way again this season, despite circumstances benefitting them yet again. Re-organisation in the EFL folllowing the expulsion of Bury last season means that there are just three relegation places from the Championship this season, but at present Birmingham sit in 21st place in the league table, with only pre-season relegation favourites Wycombe Wanderers, Sheffield Wednesday (who had eight points deducted over their own ground ownership shenanigans), and Rotherham United (who have four games in hand on Birmingham) below them.
Aitor Karanka arrived at a club with heavy clouds hanging over it, but there might even have been cautious cause for optimism when unbeaten start to the season consisting of a win and three draws left them in eighth place in the table after four matches. Since then, though, Karanka’s team reverted to type. Birmingham have only won seven league matches since an opening day win against Brentford, whilst their involvement in both cup competitions ended at the first hurdle. Few would have expected much from an FA Cup Third Round trip to Manchester City, but their League Cup involvement ended with a home defeat against League Two Cambridge United.
Only Wycombe, Sheffield Wednesday and Derby County have scored fewer Championship goals this season. At the time of writing, Birmingham are three points above Rotherham United, but Rotherham’s games in hand and vastly superior goal difference mean that it may only be a matter of time before that situation changes for the worse. On Saturday, following a 3-0 home defeat by Bristol City, Karanka stated that there was “no chance” that he would be quitting the club. Within 24 hours he was gone, and no-one seems to know for sure whether he jumped or was pushed, all of which seems extremely “on brand” for the club’s chaotic current owners.
There seem to be few signs that anything is going to improve at St Andrews, either. The club is believed to owe more than £100m to its owners, and relegation from the Championship would cost the club at least £5m in television money alone, while they’ll be losing still more money with the departure of Coventry City. And on top of this, at the end of last month the club received a troubling report from structural engineers into problems that have brought about the closure of two stands at St Andrews.
This hasn’t been a major issue to this point, with the entire ground having been closed to spectators for the last twelve months, but it certainly will when the ground reopens to the public. Corrosion of steelwork in the base of the The Tilton Road end stand and the Kop stand means that the former would have to remain closed when supporters are let back in while the lower section of the latter would as well.
It is understood that this would cost at least £1m, and the full extent of work required (and therefore the total and exact cost) isn’t even known, yet. It’s entirely possible that this bill could rise again upon further investigation, but the council are unlikely to grant a safety certificate until this work is carried out. Add further revenue drops that inevitably follow with relegation, and Birmingham might yet find that things could still get even worse before there’s any realistic chance of them getting better, certainly if they slide into League One come the end of this season.
Birmingham’s supporters seem pretty content with the decision, and making the argument that Karanka has been anything other than a complete failure at St Andrews would be difficult. Such has been the state of this club for such a long time, though, that it’s difficult to believe that the manager in this case has been anything like the beginning, middle or end of the club’s problems, either this season dor in a broader sense.
It is clear at this stage that the ownership of the club has been the constant theme that has damaged it greatly over the last ten years or, and that these woes can only realistically be ended with a change ownership. What shape that change would take – especially in light of Covid-19 and all the long-term strains that’s putting on football clubs the length and breadth of the country – and whether the damage already done can even be reversed, however, are questions that are somewhat more difficult to answer. It is to be hoped that Aitor Karanka’s replacement can reverse the dismal fortunes of this club over the last few years, because there’s precious little evidence to suggest that Birmingham City’s current hapless owners are capable of doing so.