AFC Wimbledon New Ground Proposal

Is this it? Will we finally have a ground of our own in the borough of Merton for the first time since 1991?

The club has drafted plans to build an 11,000-capacity stadium. The plans allow for the stadium to be expanded to 20,000 at a later date, presumably subject to meeting league requirements should the club be promoted a few divisions!

Galliard Homes are partnering the proposal and the idea is to build some 600 new homes, and commercial outlets as part of the redevelopment.

The proposed site is the current Greyhound Stadium although there are alternatives plans that have been submitted. AFC Wimbledon chief executive Erik Samuelson said: “There is a long way to go before our plans become a reality.” (Source: AFCW Official site)

Indeed there is a long way to go as the plans need the support of Merton Council before a formal application can be submitted.

Either way, raising the £16m estimated build cost will be hard. Yes, it’s not as much as the Emirates Stadium cost, but for a club with lean resources and without a billionaire owner, it will be a hard but not impossible.

So is this it? WIll we finally have a stadium in Merton of our own? I’m beginning to believe again!

Football’s Billions – What Recession!

Football it seems just continues to grow according to  the Deloitte Annual Report on Football Finance (May 2012).

Football in Europe grew by 4% to €16.9 billion in 2010/11, with the ‘big five’ leagues’ revenues growing by 2% to €8.6 billion. The main reason according to the Report was  broadcast media, followed by commercial revenue.

It is the English Premier League that is the front-runner of the European Leagues in financial terms generating €2.5 billion in 2010/11 with growth of 12% on the previous year. All this in a recession.

By contrast the German Bundesliga’s revenue grew 5% to €1,746m, although its clubs have the highest commercial revenue at €816m.

All of this is well and good but what about the costs? Surely they haven’t remained static? Well, they haven’t, in the ‘big five’ leagues’ wages increased by over €104m (2%) to exceed €5.6 billion in 2010/11 – less than revenue though.

While the Premier League tops the table of wages costs, it is, together with the Bundesliga, achieving an operating profit. The others do not.

Interestingly the disparity between the Premier League clubs and the rest of the league clubs continued to grow with the top professional clubs growing their revenues by 9% to £2.9 billion in 2010/11, while Premier League clubs’ revenues increased by 12% to £2.3 billion. Even within the Premier League, there is inequality according to Deloittes: “the majority if the £83 million increase in Premier League clubs’ commercial revenues was driven by the two Manchester clubs and Liverpool. Clubs with stronger global profiles and interest earned significantly more than UK or regionally focused clubs who found market conditions more challenging.” Only four Championship clubs made an operating profit.

Out of all that, the top 92 clubs paid almost £1.2 billion in tax to HMRC in one way or another, and this with all the publicity surrounding the tax mitigation techniques adopted by the clubs.

It seems therefore that football is in a very healthy state, financially at least!

(All information sourced from: Deloitte Annual Review of Football Finance (May 2012))

Rangers FC and HMRC – Update

Rangers FC, the Scottish Premier League club, have been placed into liquidation by HM Revenue & Customs.

The club owes HMRC as much as £20 million in potentially unpaid taxes and a further £75 million in respect of potential liabilities as a result of the use of its Employee Benefit Trust (EBT), and an employee share option scheme.

There had been talks to rescue the club earlier this year and a number of potential saviours came forward. One such consortium proposed a proposed a company voluntary agreement (CVA) with creditors, which would include HMRC as an normal unsecured creditor.

HMRC placed the club into administration in February this year, and now has decided to reject the CVA and has applied to liquidate the club – Creditors Voluntary Liquidation (CVL). This will allow the liquidators to consider and possibly investigate the actions of the directors in the management of the club.

Clearly HMRC must believe that in pursuing the the club and  potentially the directors/owners that it can get a better deal!

The details of the EBT have been strewn across the pages of many a website, journal and paper. So in order not to bore anyone further, I will not go into the mechanics of EBTs. It would appear that the reason the EBT’s integrity has been called into question is that the club gave certain players a written assurance that the loans advanced to them by the EBT would not be repayable. If it isn’t a loan, it must be earnings of some kind and that comes with a tax liability – PAYE and National Insurance. Let’s not forget that on top of this, there are interest and penalties of up to 100% that HMRC will also seek.

The share options scheme was worth less but nonetheless has become an issue. It seems share options were granted to players by offshore companies after the companies had received substantial funds. On exercise of the options, the players became the shareholders of their very own cash rich offshore company. Perhaps this is an over-simplification of the facts but hopefully you get the idea.

All this was under the scrutiny of a tribunal and it was long-published that a decision was due shortly after Easter this year, but it has been eerily quiet on this front.

So what of the footballing side of things?

The players and staff have suffered a 75% wage cut to help out the cash-strapped club but this isn’t going to last. I can only see the players that can securing contracts elsewhere and leaving the club. This is going to affect the on-field performances as adequate replacements will be hard to come by.

The club may well be sanctioned by the Scottish Premier League, or even receive a ban from playing in Europe, which will hurt financially.

There has been an invstigation into the club by the Scottish Football Association into alleged irregularities in player reghistrations.

The liquidation itself also throws up a number of uncertainties. There may be sanctions – fines, operating restrictions and possibly relegation from the Scottish FA. There is also the uncertainty that any rescue package will be able to buy the assets out of liquidation intact.

It’s hard to see how the club can get through these challenges intact and in the Scottish Premier League. Perhaps it will need to start at the bottom of the Scottish league structure and work its back up the pyramid, much like AFC Wimbledon did (although for other reasons!) but that’s going to be hard for the fans to take, especially given that this club is such an important part of Scottish football and culture.

The case continues…

 

Great AFC Wimbledon Article

I thought I would add something to my congratulatory piece on AFC Wimbledon‘s promotion by adding the link below. This is an excellent article on the Guardian‘s Football League blog  http://bit.ly/qglTbg.

I suppose there will be a plethora of such articles in the coming week as the new season approaches, and I look forward to reading every single one!

Paolo Michele Maranzana

Off Topic – AFC Wimbledon & Saracens

So this is my first real blog, other than that strange greeting WordPress issued for me (nice thought, bit cheesy?), and I am going off topic straight away!

I want to start by writing something about sport – well, two sports in particular – Football and Rugby. 

I am immensely proud that my team, AFC Wimbledon, achieved promotion to the league last season. It seems somehow that an element of order and correctness has been restored to the game of football after Wimbledon FC and its supporters were shamefully let down by the FA in 2002. 

Conceived in May 2002 by a small handful of die-hard supporters, the new club carried the torch of the old club, its spirit, ethos and history. In under a decade, the new AFCW achieved five promotions in nine years and restored its league status after having been unceremoniously robbed of it by the FA, the so-called guardians of the sport in this country. Like a phoenix from the ashes (I’m gushing now), the new Crazy Gang have returned and proved that fans can run a club better than most!

I was at Wembley on 14th May 1988 to witness the Crazy Gang defeat the Culture Club (to paraphrase John Motson), and I have long thought that was the best day in the club’s history. But it isn’t. Not any more. Roll over 14th May 1988, and hello 21st May 2011! Righting a wrong, A-team style, the New Crazy Gang won promotion to the League in dramatic fashion, and that is now the best day in the club’s history.

As for Rugby, my team Saracens won the league last season. Immensely proud again, and not least because I feel an added affinity for this club because my eldest (a girl) plays for Saracens under-7s (well under-8s in the coming season).

Closing thought: it’s nice to  support a couple of teams that occasionally win things but to win every season must become a little stale after a while. 

Hopefully, the muse of blogs will inspire me to write something more in line with the reason I started this blog: the general theme of  musings on life and tax. Let’s hope life and tax can be as inspiring as AFC Wimbledon and Saracens! 

Paolo Michele Maranzana