Skip to main content

The Bury saga

There is nothing surprising about a lower league club encountering financial problems. The 20 clubs in the Premier League made operating profits of £900m before transfers in the 2017/18 season. The 72 clubs in the EFL made combined losses of £411m in the same period.

Being a club in the Manchester conurbation with its two top Premier League sides is not easy. Bury have been in financial trouble before. In 2002 I remember being one of many football fans who donated £10 in return for having my name put on a seat.

However, clearly there has been mismanagement in the case of Bury. The Financial Times has described it as 'a case of speculative property finance intruding on the world of lower division football where simply running a team rarely provides returns.'

Previous owner Stewart Day was the sole director of a company called Mederco Ltd. It entered into leases on the car park that the club owned on the Gigg Lane stadium. The spaces were then subleased to retail investors for £9,995 each, with the company offering buyers returns of 9 per cent for five years. According to an administrator of Mederco, the payments are about £190,000 in arrears. Other property schemes connected to Mederco, such as student accommodation development, have collapsed into administration.

In December last year Mr Day sold the club to Stewart Dale for £1. He had had a career in the building trade, mainly through equipment hire. He did not even know that Bury had a football club.

Kieran Maguire of the PriceofFootball has commented: '11 days later [Dale] set up two new companies, Bury Heritage and Bury Leisure and started transferring assets to them, including the club’s trophies. Some would describe this as the action of a sociopathic asset stripper.'

Last month Bury put forward a Company Voluntary Arrangement to settle its outstanding debts. Non-football creditors would be paid just a quarter of the £4m they were owed.

This happened over the objections of some of the largest creditors including HM Revenue and Customs. The main creditors were Mr Dale and RCR Holdings, an Oldham registered company founded just days before the CVA meeting. As the largest shareholders, they had voting rights that overrode other creditors' objections. Mr Dale has declined to comment on reports that RCR Holdings is connected to members of his family.

The Insolvency Practitioners Association has announced that it is going to investigate the CVA: Investigation

C & N Sporting Risk pulled out of an offer to buy the club earlier this week. One issue was a mortgage attached to Gigg Lane taken out by Mr Day worth £3.7m. This was reportedly accruing interest at £1,500 a day. This was a heavy burden for a club that made a loss of £2.8m in the year to May 2017.

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...
Post a Comment
Read more