Shaken & Stirred: Bury’s Conflicted End of Season
It would appear, then, that a football club doesn’t have to be struggling near the bottom of a league table to feel the chill wind of the game’s latest round of financial mismanagement blow through it. At Prenton Park on Tuesday night, Bury supporters celebrated promotion from League Two with a one-all draw against Tranmere Rovers, the point required to take the club straight back to League One after just a year away. As the “We’re Going Up!” banners were packed away afterwards, though, the Bury midfielder Neil Danns confirmed that the club’s players had received at best half a month’s wages over the last two months and that they had decided to keep the matter quiet so as not to disrupt their push for promotion. Having achieved that aim, their attention will now surely turn to the small matter of when they’re going to actually get paid as per their contracts. At present, that may be even more of a challenge for the club than the promotion they achieved earlier this week.
The current conflation of events at Gigg Lane is somewhat different to those going on elsewhere at the moment at Bolton and Gateshead in one significant respect. Unlike these two clubs, it’s difficult to pin too much of the blame for what has happened to the club so far this year on the current owner. Steve Dale only took control of Bury FC in December, and has found himself in the unenviable position of having to fight fire after fire as the full extent of the mess that the club has come to find itself in as a result of the mismanagement of former owner Stewart Day has come to light. These aren’t merely a few skeletons in the closet, either. As time has progressed, the financial position of the club has increasingly come to resemble a deleted scene from Jason & The Argonauts featuring an army of skeletons emerging from a closet, all leading to the inevitable issuance of a winding up petition against the club by former assistant manager (and scorer of arguably the greatest own goal in the history of football) Chris Brass, which has been deferred to the fifteenth of May after the court was advised at the hearing last month that terms had been agreed with Brass to clear what the club described as a “historic debt” to their former coach.
While the former assistant manager having to take this action to get paid what he is owed was always likely to dominate the headlines surrounding this story, however, other details contained in this hearing shone a little light on the seriousness of club’s current predicament. Five other creditors were also represented at the hearing, the biggest of which is believed to be HMRC, who are reportedly owed £277,000 in unpaid taxes. They have requested to be substituted as the petitioners in the event of Brass not wishing to take the matter any further, and the other listed creditors now have to decide whether they wish to fall in behind this application as well. Everybody knows the hardline stance that HMRC takes over such matters. It remains to be seen what can be arranged over the next thirteen days.
Another week, then, means another fire that needs to be extinguished by the club. It’s a pretty familiar story at Bury, these days, to the extent that official statements from the club have become part and parcel of life for the club’s supporters. On the second of April, the club issued a brief statement confirming that, “Following on from the takeover of the Club, some unforeseen circumstances have led to interim internal financial restrictions,” and that, “We value our players and staff at the Club, and they were all informed of this last week in a number of meetings.” This, we might presume, came about as a result of players not being paid for the end of the previous month, a situation that was partly resolved by the intervention of the PFA, who paid 50% of the wages of those who were amongst their membership. Two days later, something considerably more substantial followed it from Dale himself:
I can confirm that there is some element of truth in the circulating information relating to the club’s financial affairs. Due to a number of unforeseen issues, the financial position of the club is significantly worse than what was discovered during our due diligence process prior to the acquisition. The full extent of the problems inherited from the previous ownership of the club have become apparent over time, and this has undoubtedly led to our current difficulties. It is certainly a testing time, but we can overcome it. We will overcome it.
To address some of the gossip pertaining to my own position, I can assure you that this remains the same as it has been from day one. On the pitch, I have always been clear that I can add nothing; from that perspective, the club is in the highly capable hands of our Sporting Director, our Manager, and the players. We’re currently sat third in the league, and so I consider them to be doing their jobs extremely effectively. If in any given week the team loses a bit of form, showing them support and enthusiasm will help them rise to the occasion, as they have so many times before. The distain that has been shown in light of recent results, however, is not only disappointing in the extreme, it’s disheartening to a team who have performed exceptionally all season. Fair weather fans are not true fans.
On the financial side, I made a commitment to get the club on an even keel, at which point my job would be done and a new, younger custodian could take over. That is still my aim, and what I’m working towards, although this process is slower than I would have liked due to the new issues that have arisen. Whilst many in my position would have walked away having unearthed the true position of the club (as some of my advisors have urged me to do), that’s simply not my style. But nor am I a never ending ATM machine. Fiscal prudence and fans through the turnstiles are what will ultimately safeguard the future of our club. The former of which we’re working on, and the latter of which we need your help with. The continuity of any club is only viable by the support and attendances of its followers. Supporters are the blood we need through our veins, so bring as many family and friends as you can, get behind the team and have a great day. This will serve as a valuable contribution to securing the future of our club in the immediate term, as well as for future generations.
Another point I would like to address is my non-appearance at the game on Tuesday night. Unfortunately, my illness has rendered it impossible for me to be as able as I once was. On Tuesday, I left my house at 5am and didn’t return until 8.30pm, having had back-to-back meetings and a 9-hour round trip in the car. All of which was to safeguard the future of our club. Upon my return, I was understandably drained and so I was unable to attend. When I’m able to, I attend all of our matches, including our ladies and youth team. This isn’t a chore to me, I enjoy every match I watch and am an avid supporter of every team at Bury FC. It, therefore, saddens me to have to address speculation about my commitment to the club, which has been unwavering from the start.
The final point I want to address is the extreme unpleasantness experienced after the match on Tuesday evening. Whilst people are allowed and, indeed, fully expected to have their opinions, the actions of a select few individuals after the game was shocking, unnecessary and completely inexplicable. The threats and abuse (much of which appears to have been based on false information) endured by directors and staff, who have been going many extra miles behind closed doors, was a disgrace. To be clear, any further behaviour of that nature will result in anyone involved being banned from the club indefinitely.
Of all of this, what stands out above anything else is the comment that, “the financial position of the club is significantly worse than what was discovered during our due diligence process prior to the acquisition.” Considering what has happened to the other businesses owned by Stewart Day this year, perhaps this isn’t even that surprising. Four separate companies belonging to Mr Day had already entered administration with debts of £27m, and they have now been joined by a further two, Mederco Huddersfield and Mederco Block A.
These two companies had already been under some degree of scrutiny last year after it was revealed that a property development in Huddersfield which had been specifically constructed with planning permission granted solely as student accommodation, was being let as studio flats. Earlier this year, meanwhile, flats constructed by a Mederco firm in Bradford had to be abandoned earlier this year after a failure to secure a fire safety certificate from the West Yorkshire Fire and Rescue Service. Accounts for Mederco Ltd for 2017 showed that Day loaned £4.2m to the football club, as part of a series of inter-company transactions since he took control in 2013, and on top of all of this Day was also involved in a deal to sell off more than 250 car parking spaces at Gigg Lane, a project which now owes £190,000 to investors.
A further statement from Dale last week went into further detail about the club’s current financial position, and his assessment of Day’s period in control of the club – “a business that has been completely mismanaged and stripped of almost all tangible value over the course of the last few years” – could hardly have been more damning, whilst elsewhere he spelled out the current position in which the club finds itself in the clearest terms possible:
It’s a Club with 4,500 regular fans; it has staffing levels akin to a Championship Club. We need £1.6m to pay wages, HMRC, pensions (not creditors) to the end of May, and we have a projected income of £180k for this period. As a comparable, our wage bill to end of May is equivalent to 2/3 of League One Accrington’s TURNOVER for the year.
This statement also had a sting in its tail. Dale confirmed that the club was now up for sale and that, “Consideration will be given to prospective buyers who are able to commit the necessary time, money and full, undivided attention that’s needed to build upon the progress we’ve made.” In a further update a couple of days ago, the club confirmed that it had received “a number of expressions of interest from parties wishing to purchase the club.” Although at the time of writing the identities of those expressing this interest remain unknown, although the club’s supporters trust, Forever Bury, did also release a statement confirming this, and that, “a number of these parties are undertaking a due diligence process.”
One wonders whether they will do a better job of this than Mr Dale seems to have done, though saying this may be a little unfair on the current owner, when it seems clear that the bulk of the financial issues facing the club stem from his predecessor’s period in control. Considering the events of the last six months, it would certainly be wise for any prospective new owners to go through the company’s accounts and bank statements for the last few years with a fine-tooth comb before signing off on anything. After all, this is the club for which ‘Debt Collectors Tried To Take Our Goalposts’ was a newspaper headline just last week, and at which another club director, Matthew McCarthy, recently publicly apologised for its current financial predicament. The Football League, meanwhile, lived down to everybody’s expectations of what they will say when a club finds itself in this sort of position by issuing a statement in the middle of April which was more like a Clubs In Crisis Newsletter (it also covered Bolton, Coventry, Blackpool and Birmingham) in which it described the situation at Bury as “extremely concerning.”
At present, Bury have short, medium and long-term issues. In the short term, it’s unlikely that HMRC will agree anything other than pushing for the club’s liquidation at court in thirteen days time, though another deferral of the hearing might be likely if takeover talks have significantly progressed by then. In the medium term, the matter of closing that gap between the £1.6m it had in liabilities and the £180,000 it had in expected revenue doesn’t seem to have been resolved yet, and while the commendable actions of the players in recent weeks will have gone a long way towards promotion, they still need to be paid and the club needs restructuring from top to bottom in order to fit the reality of its financial position. A confirmed takeover will be likely to achieve this, but that isn’t quite guaranteed just yet. And in the long-term, there is the small matter of the mortgages taken out and the loans made by Stewart Day while he was running the club. That is a situation that really can’t be commented upon at present, though the new owners might do well to thoroughly investigate what exactly was going on at Gigg Lane while Day was running the club.
Set against such a background, Bury’s promotion at the end of this season might well turn out to be a lifesaver for the club. Television money, season ticket sales, commercial revenues and other income streams should increase – even if only modestly – with promotion to League One for next season, and the optimism which ordinarily accompanies promotion may also prove to be beneficial in terms of persuading those currently carrying out their due diligence that this is a club worth investing in. Perhaps Steve Dale as naive and hasty when he bought into Bury in December. It certainly seems that he bit off more than he could chew in getting involved at this club at this time and if his health is suffering as a result of all of this, then it’s right that he focuses on that for the foreseeable future.
In a broad sense, Bury have gotten a little lucky with the team they had this season, and those who finished below them in the table this season may feel a little aggrieved at one of the League Two promotion places being claimed by a club in such a financial position if they’ve been controlling their expenditure carefully themselves. The club ultimately has to change, though. Like so many others in the Football League, the previous owner seems to have prioritised chasing towards the end of a rainbow over the long-term financial wellbeing of the club, and it’s saying something that is the most generous possible interpretation of his time in charge. But that need for change is very real, and it doesn’t only apply to Bury. The entire Football League, from the dream-chasers of the Championship to those living hand-to-mouth at the foot of League Two, needs considerably greater regulation and protection from exactly the circumstances in which Bury have found themselves over the last few months. There seems, however, to be little appetite at present for the sweeping changes that this would require within the EFL. Plus ça change, in more than one sense.