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Archived News from March 2008

DAVID CONN ON JOHN BATCHELOR
21st March 2008 19:05


David Conn: York's home left at mercy of property developers

Supporters in despair as Football Association is accused of failing to apply its own rules to safeguard club stadiums

19 October 2002

While York City's new chairman, John Batchelor, continues to generate headlines with his blue-skies thinking for football's future, the club itself is poised to lose its biggest asset. Batchelor, who promised last spring to buy the club together with its Bootham Crescent ground, when both were offered for sale by the club's former directors, in fact bought only the club, for a nominal amount.

Bootham Crescent, which sits on valuable residential land in the prosperous Minster city, is still owned by a holding company, Bootham Crescent Holdings (BCH). Its main shareholders are Barry Swallow and Colin Webb – still, remarkably, directors of the club – John Quickfall and, with 55 per cent, the principal target of York fans' indignant fury, the former chairman, Douglas Craig.

It has now emerged that these four men – and their wives, to whom 454 shares each were transferred last April – have sold 10 per cent of BCH to a housebuilder, Persimmon Homes, which has taken an option to buy the ground and applied for planning permission to build 90 homes on it. Craig would not say how much they received for the shares, but a guide was provided last January when club and ground were put up for sale for £4.5m. Local sources estimate Bootham Crescent is perhaps worth around £3.5m to a housebuilder. If this lower figure is correct, Persimmon would have paid the directors £350,000; Craig's share would have been around £220,000, the other three £32,200 each, their wives nearly £8,000 each.

Ian Hessay, Persimmon Homes Yorkshire's managing director, said the shares were taken as security for a 10 per cent deposit the company has paid to buy Bootham Crescent, which is returnable if planning permission is refused. But Craig said, as far as he was concerned, this was not the case; the money from the sale of the shares was theirs and not returnable. "It is just as if you had sold your house or shares in Marks and Spencer," he said.

This news has infuriated York City Supporters Trust, whose energetic and assured response to their club's crisis was highly commended in the Trust of the Year awards held recently by the Government-backed initiative, Supporters Direct. Richard Willis, the chairman, said: "The football club is not a piece of property like any other. The directors were entrusted with looking after the club. Instead they threatened to kill it – and are now making a killing themselves." It is understood that previous directors ran York according to the traditional principle of custodianship, not to make a personal profit out of it. The previous chairman, Michael Sinclair, who later converted to the priesthood, is known to have passed his 123,000 shares to Craig in 1992 for less than £1 each, not for a higher amount measured according to the value of Bootham Crescent for housing. Craig said this week there was no such tradition and that Sinclair had passed him the shares for "the market price", although he would not say what the figure was. Apart from buying the shares, Craig did not have money or personal guarantees outstanding at York. He had previously loaned money but this was repaid in the late 1990s.

The York affair has highlighted starkly the Football Association's failure not only to protect its member clubs and their grounds, but even to uphold its own rules, few as they are. The FA has a rule specifically to protect football grounds from being sold for profit by people who have bought up club shares. It is quite neat, providing that if a club is wound up and goes out of existence, then when the assets are broken up and sold, the proceeds cannot be swallowed by the shareholders. Instead they must be distributed to local sporting institutions or charities.
In July 1999, Craig wrote to all York City's shareholders seeking approval to bypass this rule. He said he and his fellow directors, Webb, Quickfall and Swallow, wanted to transfer the ground and all other assets out of the club and into the holding company, BCH, free of the FA's rule. The club would be left with no assets, except membership of the FA and Football League. Craig's letter said: "Your directors are concerned that in certain circumstances these [the FA's] provisions could adversely affect the ability of the company ... to continue playing football at Bootham Crescent."

Craig and his fellow directors owned 94 per cent of the shares and the transfer duly took place. In a long interview with me this week, Craig failed to explain how the FA's rule could be interpreted as set out in his letter. The rule only applies to the distribution of assets when a club has already ceased to exist, so by definition it cannot stop that club playing at a particular ground in the future. Craig accepted that the reason for bypassing the rule was so that the shareholders could keep the money from selling the ground. "It is not acceptable in the modern era that if a club closes, its proceeds go to the FA or charity. The shareholders should have the right to the proceeds as with any business."

The FA has failed to respond meaningfully to the York scandal, which has disturbing implications for other clubs, many of whom make losses but sit on prime town centre sites. In January, I asked the FA's chief executive, Adam Crozier, Nic Coward, who is responsible for the FA's rules, and Paul Newman, the head of communications, why they maintain the rule but allow clubs to bypass it by forming holding companies. None replied. Crozier later told me he had asked Coward to reply. This week Newman did not return my call.

Richard Willis, the supporters trust's chairman, has been dismayed: "The FA have this rule, yet when it was bypassed they did nothing. They're the governing body, but seem to have no powers, no beef, no teeth." The trust has complained to the Independent Football Commission, the new toothless body set up to improve football's "self-regulation", and it remains to be seen what difference it can make.

Craig's justification for the carve- up was that the club, like so many, was losing money because of players' wages and could not continue on its gates of around 4,000. He believed it was "immoral and unacceptable" for clubs to "welch" on creditors by going into administration. Instead, he and his associates had offered the club for sale separately, it was bought by Batchelor, and continues to play at Bootham Crescent for now. He said the holding company had been "very generous" to the club. On the question of whether it would have served the club better for it to keep Bootham Crescent and any proceeds of sale, Craig said he did not believe the club could afford to service debts which would inevitably be incurred if the club builds a new stadium. Any money received from Bootham Crescent would therefore be worthless to it, he said. He said he did not know how much money he would ultimately make from selling the ground: "I haven't had it valued."

John Batchelor has caused some stirs in his short time in charge of the club, which he runs in conjunction with his team in the British Touring Car Championship. Because that event is covered by ITV, he said he can attract national sponsors, like B & Q in the previous two seasons, whose money will subsidise the football club until next June, when expensive player contracts inherited from Craig's regime come to an end. Persimmon has provided substantial sponsorship to the "York Sporting Club", which has been split between the touring car team and the club. Batchelor has set out a vision to build York a new stadium, and as the club now has no ground to sell, he hopes to finance it by having a hotel on one side, a casino on the other, and have the two ends paid for in grants from the Football Stadium Improvement Fund. He promised to make good on his initial commitment to give the supporters trust two seats on the club board, and is offering them 24 per cent of the shares for £24,000, to be invested in local community projects.

Of the story that he has proposed a breakaway Football League sponsored by the Rayovac battery company, which seriously excited one Sunday newspaper last weekend, he said that his idea is that all clubs could securitise – a form of mortgage – their future gate receipts to refinance the League, and Rayovac might be a future sponsor. The idea has not met with overwhelming enthusiasm from the League. "Here," he said, "we are trying to be positive and do the best for York City."

York fans are rallying but many remain angered by the plans of Craig, their former chairman, who is now sitting at home, at an address which is also that of his holding company, which owns and intends to sell their Bootham Crescent ground.
davidconn@independent.co.uk


David Conn: Batchelor fails to halt York's slide into chaos

Outraged supporters face fight to save Third Division club from extinction after motor sport impresario's grand plans fall flat

21 December 2002

Several accusations have been levelled at John Batchelor during his brief, ultimately bitter, stint as the chairman of York City, but shyness has not been one of them.

Before taking over in April, Batchelor promised an era of glasnost with the fans, who were still emotionally poleaxed by the actions of the former chairman, Douglas Craig. He had transferred the club's Bootham Crescent ground, for around £166,000, to a holding company 94 per cent owned by Craig himself and three other directors, then last January announced he was to sell the ground and the club for £4.5m. Batchelor, a former toilet paper salesman turned motor sport impresario, told the then fledgling Supporters' Trust that he would buy the ground as well as the club and offered them 25 per cent of the club's shares and two seats on the board if they backed his bid.

They did, but, as it turned out, Batchelor bought only the club from Craig, for £1. The shares and directorships for the Supporters' Trust never materialised. Only three weeks ago, Batchelor went on to the pitch at half-time during the home match against Swansea City and promised to give 100 per cent of the club to the trust, but subsequently said he had been advised against it.
Batchelor's plan was to combine the club's fortunes with his British Touring Car Championship motor racing team, which he said could generate media exposure and sponsorship. He soon made the curiosity columns by changing the club's name to York City Soccer Club and redesigning the kit and signs round the ground to incorporate a black and white chequered flag. He made national headlines by claiming he was considering suing the Football League over the collapse of ITV Digital, and more recently presented a plan for a new league, sponsored by an American battery company, which he said could be financed by all clubs mortgaging future gate receipts. He also signed an Argentinian and a Brazilian, Rogerio – no, really – in an attempt to generate excitement.

This week Batchelor's eight months in charge ended as the club crashed into administration with debts of around £500,000. The fans are now bitter in turn about him. Craig provoked further outrage two months ago when it emerged that a housebuilder, Persimmon Homes, had applied for planning permission to demolish Bootham Crescent and build 93 homes on the site, and had paid an estimated £350,000 to Craig and his three fellow directors for shares in the holding company, Bootham Crescent Holdings. It has now been revealed that as part of the deal Persimmon paid £400,000 in sponsorship to Batchelor. Both said the deal was for the "York Sporting Club", which included the football club and Batchelor's racing team, but the contract was with Batchelor personally to sponsor the racing team, and the bulk of the money, £300,000, has gone to the cars. Batchelor did put £100,000 into York as a loan, but has subsequently withdrawn up to £70,000 of it for expenses and to pay for hospitality at Brands Hatch, tickets for Silverstone and other motor racing activities. Batchelor said this week that was perfectly legitimate because the money was his, and he was trying to associate York with motor racing to generate interest and more sponsorship.

Batchelor said he had worked full-time without a salary to make the football club a success but said it was impossible after ITV Digital was pulled by Carlton and Granada, just 17 days after Batchelor did his deals with Craig and Persimmon. He said this week that he had "known better days", adding that he would now lose between £30,000 and £40,000 of his loan that he had left in the club. "We lost only £100,000 directly in lost TV income," Batchelor said. "But the major impact was that the transfer market collapsed." York have traditionally survived by selling youngsters such as Jonathan Greening and Richard Cresswell, but were forced to off-load an England Under-21 goalkeeper, Russell Howarth, to Tranmere Rovers for only £25,000. "The League's internet deal also collapsed – overall we have lost perhaps £500,000."

But Steve Beck, a director of the Supporters' Trust, said: "The fans feel very let down. John promised many things, but all he has delivered is a quarter of the Persimmon sponsorship, which went in as his loan and has been steadily withdrawn." The administrator, David Willis of Jacksons Joliffe Cork, startled nobody with his prognosis for the 12th Football League club to be in administration this year. "The amounts being paid in wages, mostly to players, are simply too high, 120 per cent of the club's total income." The current wage bill is £70,000 a month and while the contracts of 14 of the 23 professional players end this summer, total wage commitments to the end of next season are £800,000. The League warned in the summer that clubs could last for a few months on season ticket sales and other commercial income paid up front, but would feel the chill in winter. This week Willis advised that York had become insolvent and could not pay the Inland Revenue PAYE or outstanding VAT, a total of £150,000.
The Professional Footballers' Association has paid the players for November and December, a gift which will be repayable if the club is saved. Other debts, Willis said, were £200,000, the usual gloomy round of suppliers and trade creditors, although he thought that, uniquely for clubs in administration so far, York were up to date with their payments to St John Ambulance. Willis has allowed until 18 January for a solution to be found, because enough cash should come in from forthcoming home matches against Lincoln City, Hull City and Scunthorpe United. After that, the club will be broke and will go into liquidation without a rescue package.

There is some optimism, however, because building the club a stadium on the edge of town does represent an opportunity for a developer and some local businessmen have expressed an interest in helping. The local council wants the club to survive, and the Supporters' Trust, which has shown remarkable commitment, hopes and believes it ought to be part of any solution.

Fans were not slow to discover that in June Batchelor bought a house for £250,000 which is now on the market for substantially more. "I was renting at the time," he said. "This house came up at a good price and has appreciated considerably and now I am selling it to find something more suitable." He said that after his address and phone number were briefly posted on a York fans' website, his 10-year-old daughter had answered the phone to a voice which said: "I'm going to kill your daddy." "That's when I lost a bit of interest in the club," he said.

Batchelor fiercely denied that he had profited unduly from his time at York but said: "Look, I'm a businessman. That means I have to make a profit from what I do. And that includes football. I know people find that hard to take because they think football is a community asset. It is, but it doesn't stand a chance if it can't make a profit." The club are losing an estimated £20,000 per week. "Even if I had put another £200,000 in, that would have been lost."

On Thursday Craig announced that York can stay at Bootham Crescent beyond next June, the limit agreed with Batchelor, on the condition they set a strict timetable to upgrade and then move to York's Huntington Stadium. That has not exactly been embraced as an act of generosity by supporters still outraged at the transfer of the ground to BCH by Craig and three other directors, Colin Webb, John Quickfall and the former 1970s playing hero, Barry Swallow. It was done in 1999 specifically to bypass a longstanding Football Association rule designed to prevent shareholders profiting from the sale of a ground when a club goes bust. Land Registry records show that BCH paid only £165,890 to the club for the ground, and were then given a 25 year lease. Earlier this year that lease was cancelled and replaced by a tenancy to the end of this season.

One small BCH shareholder, David Rusholme, has called for others to join together in a campaign against the transfer. This will join the Supporters' Trust and a Friends of Bootham Crescent campaigning group, all embodying a depth of support and strength of feeling which shows that the fans will not allow this beleaguered football club to die without a fight.
davidconn@independent.co.uk




 

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