BCFC: Which way does the long long road lead?

10 Feb 2021 | 10 comments

... and what is the probability of a happy abode or sticky end?

Blues Trust has been concerned for some considerable time about the long-term future of our great Club. We have always said the fans are the true owners of a football club and those that financially own the club are only custodians. As fans we have to accept different custodians, some good, some bad, but what is unacceptable is the custodians putting at serious risk the future existence of the club. Our fear is that the financial position (over £100M debt) is fast becoming an unrecoverable position. There should be new accounts out soon that will let us look more accurately at the state of the finances; and the income from Jude Bellingham and Che Adams transfers will likely show a profitable year, but our view is that the club still has an underlying loss of over £20 M per year.

The situation is more complex than the scenarios we discuss below because of the web of owners / shareholders, the parent company BSH continuing to shore up the effectively insolvent BCFC to maintain its HKSE listing and the paper value of its shares (Please see the excellent work and explanations offered on almajir.net to understand this).

Promotion to the Premier League (with an increased income of about £110M per year) and staying up, together with a balanced financial plan, appears to be the only way to pay off the debt, sustain the club and become profitable. The essence of this is stated in the recent partial sale agreement of the club to Vong Pech. In that agreement an assumption is made that the position in the Premier League is sustained and there will be no increase in expenditure and wages (although this is described as fantasy by our Financial Analyst from the Football Supporters Association).

Promotion is clearly not going to happen this season and even if relegation to League One is avoided, the financial position will be more severe next season; the Club will still be in the position where promotion to the Premier League is the way to avoid insolvency. How long the owners continue funding (through various means) an effectively insolvent club becomes the question. There comes a point when the debt and financial stress is that high that even Premier League income would be insufficient to turn it round.

Relegation to League One would mean reduced income, the same operating costs (unless there is a fire sale of players) and tighter financial regulations pointing to a faster accumulation of financial difficulties in an already effectively insolvent club. Additionally, the possibility of Premier League income disappears for at least two years. Again, the question is how long would the owners continue to fund the losses and not require BCFC to repay debt / loans to them .

Our fear is that insolvency is inevitable – whether by the owners running out of money, deciding to cut their losses, creditors bringing winding up orders to have CCJs paid or authorities (HKSE / EFL / Companies House) deciding that there have been financial dealings outside their rules.

There is a strong argument for believing that the poor performance on the pitch (for several years now) is a symptom of unrest and failing in the Board room. Over the past few years the Club has regularly…almost routinely… changed players and changed managers, all to no avail. The current squad is good in terms of quality and the current manager has a decent track record at this level. But performances and results are consistently poor. At the same time, worrying reports continue to emerge that employees of the Club at all levels work in a very challenging environment and one which is not conducive to achievement and success. Again, is this linked to the culture from the board room infecting all parts of the Club? In support of this assertion, think about when you have worked for a company where the top bosses are genuinely supportive of you and then contrast this with working for a company where senior management threaten and blame you. Which company gets the best out of you?. Much of the time this is psychological and not on purpose; so this is not about criticising the players, manager and other employees but trying to understand what might be happening.

At the Trust we are doing work to understand and prepare for what would be required if the Club should fail financially. We have in place contingency plans for if the worst should happen, including plans to engage with administrators to find new owners with the Club and its fans at heart.

It is the Trust’s view that a change of ownership would be the best catalyst to emerge from the current sorrow and frustration that all supporters are clearly feeling. However it is very difficult to find a way to promote a change in ownership. It’s true that the louder and more united the fans voice is in calling for a change of owners, the higher the discomfort felt by the Board. However,  we know from experience that the existing Board is not minded to share information with supporters and that their ears are mainly closed to the fans. We have repeatedly tried for dialogue but without success. We have found that having a loud voice in Hong Kong can be more effective (our coverage in South China Morning Post) and that complaints to HKSE can have an effect (1875 campaign last year). We also consider that bringing complaints to the attention of the EFL can help to promote further investigation. We will continue to explore these and other routes to ask questions and highlight failings within the Club.

Unfortunately these actions do not promote change in themselves, but the more complaints and the more specific they can be then the more chance of authorities forcing a change. At Blues Trust we are open to any suggestions to promote change and we encourage Trust members and supporters to share thoughts and ideas with us.

KRO – it’s going to be a long long road.

Blues Trust

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10 Comments

  1. Robert Raithby

    Well, at long last you have at least got to the question that should have been uppermost in the Trust’s minds when it was initially formed, and should have been worked on since that time. For those who do not know me, I am an origininal steering group member of the Trust who became disillusion with the direction and strategy taken by the Trust and left after contributing a good deal of my time, effort and patience. Whilst I firmly believe there were significant opportunities missed in thoise early days, i am a firm believer that it is never too late. If you start to get on teh right path on that long long road, I will consider rejoining. My belief in the area and club is massive, and I find it frustrating to sit on teh sidelines. Ah well, enough for now.

  2. david wade

    Thank you for writing this article which is well thought out and hopefully it will be read by the owner. It is becoming increasingly obvious that the owner is going around in circles trying to find a way out of this financial disaster. The Adams and Bellingham fees must have helped but a lot of that money has already been wasted. Expert advice is badly needed and it would be a good start for the owner himself to sit down with the Blues Trust and to find a way forward. It seems inevitable that there will have to be a change of ownership soon as the money will one day run out completely. It must seem very likely that future share issues will be unsuccessful. We all have our pride and get things wrong but surely it is time for the Blues owner to find a way forward for himself and the club.

    Please Mr King, if you read this do the right thing. Investigate whether or not Blues Trust can find a way to help.

  3. Bill

    It’s been obvious for a year or two that the level of earnings to costs and the ever growing debt arising from the shortfall is going to endanger the very existence of the club. Somehow those in control have managed to bridge the gap but if this doesn’t continue a ‘disaster’ plan is necessary just to keep our beloved club in existence.

  4. Leonard Brookes

    Would it be possible to organise a ‘fans demonstration’ outside the club ? This would show the owners the strength of feeling of the fans.

    • james mcgrogan

      I think that is the only way for the owners to understand that the club has to change I suggest a time after lockdown to obtain as much support as possible.

  5. Les Green

    The only way forward with the current owners is to employ a British director of football to liaise between coach and supporters with the board staying in the background. This must be done in the full understanding that some of the higher paid players are sold.

  6. Brian King

    COVID is at present helping the owners of our great club. We have got to find a way of getting the emergency bells ringing out to the larger public. We are in the hands, allegedly, of very unscrupulous owners who are using the club and it’s HongKong Stockmarket listing for nefarious business activities that has nothing to do with football.

  7. Jimmy

    The owners of the club have made consistently bad decisions. Sacking Gary Rowett when we were on the cusp of the playoffs, then the appointment of Zola after his previous mediocre management career in Qatar (who would have taken us down).The bizarre parting of the waves with Harry Redknapp the following season. Appointing Steve Cotterill. Breaching financial fair play and hindering Gary Monk with points deductions. Going down the so called Spanish route buying so many bad players most are forgotten. Falling out with Gary Monk. Yes we kept Jude Bellingham but really the money from his sale has gone or wasted already . I would rather have a decent manager than a boy wonder who was always going to be sold. Appointing Pep Clotet and so on…. The owners are very very bad for the club. We should follow the lead of Liverpool when they campaigned to get rid off their last owners and campaign loud and noisily home and away at every game when we return. They will not go voluntarily so let’s embarrass them in the ground at every opportunity and let Ren and his bosses know what we think of them !

  8. Valentine Mark Phillips

    The villains of the piece in this whole sorry saga are Gold, Sullivan and Brady. They sold the club for 4 times its then value to a Chinese hairdresser fronting unknown and questionable Chinese “investors”. It is now clear that the only reason Carson Young was involved was because he was the only person in the Chinese camp with any knowledge of or interest in football. And I know this because he said at the time the offer was made he would appoint Zola manager once he gained control. And almost 9 years later as Rowett was being shown the door who should turn up but Zola who by then was a busted flush as we soon discovered.
    Carson Young, of course, was the fall guy and went to prison for money laundering. It does not take a great deal of imagination to link that fact with the 4 times the value of the Club which was paid on purchase.
    Since Blues won the Carling Cup the owners have, over 10 years, systematically destroyed the Club through total ignorance of English professional football and the way it operates, combined with utter incompetence and mismanagement. Chinese culture has no part whatsoever to play in the professional game in this country. The Club is rapidly reaching its nadir where administration is the only solution and the Club will have to start again from scratch. Sad but true.
    May I congratulate the Trust on an outstanding article and I urge all Bluenoses to come together and do whatever it takes to save and preserve our great and beloved Club
    KRO

    • james mcgrogan

      I think blaming David Gold & David Sullivan for our unfortunate predicament is forgetting what they did for us.The ground the team were derelict I would of included the training ground but we didnt realy have one.They gave me new hope and pride in my club.If they hadnt of been forced out perhaps we would be fine and still in the Premiership not under the shadow of villa and chinese couldnt care less owners.We only have ourselves to blame perhaps?

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