Wednesday 22 July 2009

Still In Limbo

Well, in the end it took an article in The Mail (as if any self-respecting human being would read – let alone believe - anything in that rag) rather than the various appeals by fans to prompt a response from the board. And the statement issued read like the conclusion of an Iraq inquiry set up to answer questions that avoided the real issues. It was the sort of statement that would have been appropriate a couple of months ago but by now still leaves me somewhat mystified – and as is evident from other posts only serves to encourage speculation that our financial situation is indeed significantly worse than we were assuming.

The statement was admirable for its brevity. It contained three points. First, confirmation that one approach for the football club (“through an acquisition of some of the assets and liabilities of Charlton Athletic plc”) is “being processed”. Reading between the lines (and with absolutely no inside information), this would seem to indicate that the Varney offer, if such exists, is a complicated mix of purchasing assets and leaving a rump company to go into liquidation. I presume that this is behind the time being taken as the club will be taking legal advice over whether a deal as envisaged would be sufficient to avoid a 10-points deduction.

A prospective takeover of Southampton which seemed to be based around a new company stripping out what was viable and leaving the remainder (a football version of the ‘good bank/bad bank’ restructuring) was quite rightly deemed to be unacceptable. Whether we can square the circle with certain adjustments remain to be seen. But the conclusion has to be that the deal being ‘processed’ carries a significant risk of falling foul of the football authorities and that we will start the season on -10 (but still above Southampton on alphabetical order). If this reading is correct, presumably Richard Murray and the board are weighing up the merits of risking the points hit as well as the personal losses they face.

We only have access to the club’s accounts (and debt levels) as of end-June 2008. At the start of last season Murray outlined that the intention was to run the club on a breakeven basis. It has to be assumed that this goal proved unattainable and that the debt situation deteriorated significantly through the past 12 months (leaving aside the fresh cuts to be made to adjust to life in the third tier and the loss of parachute payments; perhaps the collapse of Setanta Sports has also affected projected TV revenues). As just over £4m of the club’s bank debts of around £7m in mid-2008 were at floating rates there should have been a benefit from lower base rates, but clearly it’s likely that various revenue streams fell short of expectations through the past year (except for beer sales as most of the time we were crying into our pints), while costs probably overran, not least as loan signings were made in the failed attempt to avoid relegation.

Given this, the complete absence of any comment regarding The Mail’s figures for our debt would suggest that they are not wide of the mark. If they were the club would have been quite entitled to rubbish the estimates. That, plus the above reading of a Varney offer, makes speculation of administration perfectly understandable. Given that the bulk of debt is directors’ loans and bank loans secured against The Valley, and that players contracts are now ring-fenced, simply going into administration still doesn’t seem to make sense to me as there’s little to be gained (unless other debts have spiralled in the past 12 months). But a Varney acquisition of parts of the club’s real assets and leaving the remainder in a zombie company does. Again, this would put the ball in the court of the Football League as to whether we get the points deduction.

Second, “the board of Charlton Athletic plc would like to inform all supporters and shareholders that it will, as always, act in the best interests of Charlton Athletic plc and the football club”. Pardon me, but that’s the obligation of all directors of any company. I don’t think criticism of the board for the absence of any information has come anywhere near to the point of questioning the intentions of Murray et al. Whatever mistakes have been made, the basic goodwill and trust that exists remains in place; the directors have been the ones bankrolling the club and are seemingly set to take sizeable personal financial hits. Rather the criticism has been born out of frustration over the lack of information and the time taken for any deal to be concluded – or indeed scrapped.

Third, and following on, “we are mindful of the financial consequences (of relegation) and will continue to work towards ensuring that Charlton are prepared for the new season, both on and off the pitch”. Well, that goal is impossible until the ownership of the club is resolved. I want to prepare for the new season and to start to get ‘up’ for the coming challenge. But you have to have a base to move from and as yet we don’t have that. May it come quickly. I don’t know how the players (including Matty Holland) feel about it all, but whatever is said you can’t prepare until you know who’s staying, what points total we start the season with, and whether the manager is being kept.

In these respects we are behind Southampton. At least they know where they stand: -10 and with Pardew in charge. No doubt his reception when he returns to The Valley will be frosty at best. Personally I’m not inclined to give him a hard time. He did his best, but all the indications are that he simply isn’t anywhere near as good a manager as he seems to think he is. Perhaps he will learn from his mistakes, but that requires a level of self-assessment may be beyond him. Perhaps, as Murray said of Dowie, he interviews well.

As for player comings and goings to date, the departures of Hudson, Ambrose, Weaver, Wright and Zheng Zhi are all understandable, the prospective sale of Gray to be welcomed (I remember commenting when we signed him that he could be the new Jim Melrose and provide the added push to get us back into the Premiership; I didn’t realise he was actually the new Barry Endean, without the charm). Replacing Hudson with Llera on a free would seem to make sense. And from Parkinson’s comments about new right-back Richardson being the sort of character we need, the implication is that Moutaouakil is not. Whether he can be sold or just left to waste in the reserves remains to be seen. Another case of a promising player who has gone backwards with us.

As things stand, parts of the team likely to start the season can be predicted. In goal its Elliott with Randolph the back-up, Richardson at right-back (with Solly probably ahead of Moutaouakil as the replacement), Youga/Basey the left-back options. Llera in central defence partnered by Fortune presumably if he stays, with Semedo the emergency reserve (let’s not forget Matty if he is kept and Mambo if he continues to progress). But midfield and up front is less clear. Shelvey, Bailey, Spring, Holland, Semedo, Racon, Sam, Stavrinou and Wagstaff looks like a powerful range of options, but a couple may still be on their way. Up front it looks like Burton in pole position alongside one of Dickson, McLeod or Fleetwood (if he is not sold to Exeter). We have yet to cut our cloth completely – and at the moment we still don’t know what size the suit is meant to be.

For me, there’s Ipswich still to come (that is going to be a sad occasion as we all know there was a time when we cherry-picked their best players) after which its off to France on hols. I will miss the season opener against Wycombe and the trip to Hartlepool (which might have been fun in a desperate sort of way) and will kick off with the Orient excursion (actually one of the few games I was looking forward to). So there’s still time to get my mind right. If I can’t I’m going to soak it in wine and cognac. OK, I’m going to do that anyway, but hopefully in celebration and anticipation rather than despondency.


Anonymous said...

The comment on the possibility of administration is intersting. I can't believe that a sale could trip the club into administration by mistake/default but it is the football league we are dealing with here and I take your point.

Burgundy Addick said...

As I read it, the (Varney) offer involves the purchase of some of the assets of the plc. In other words it does not involve buying the company lock, stock and barrel (or investing in it). This can easily look like a ploy to avoid going into administration and deemed not acceptable (as with the earlier Southampton bid). I'm no lawyer, but the club is clearly talking to theirs to see what makes sense and what would be ruled out, in the football community at least. Either way, the chances of my few shares funding my pension are diminishing by the day.