CHERRY RED

There was me thinking Bournemouth’s tale would have a happy ending or at least an ending in sight. Alongside Mansfield and Southampton, Bournemouth’s woes were almost romantic. The team’s remarkable win at Champions-elect Swansea, one-nil down with NO minutes left, suggested another Easter resurrection, their relegation nowhere as assured as when they entered administration and were deducted ten points. AND Harry Redknapp said he’d save them. What could go wrong? Well…

AFC Bournemouth and Boscombe Athletic (bet their scarves are warm, with that to fit on) are war veterans in financial-troubles, critics tracing these back to Redknapp’s generally well-regarded 1980s managerial tenure, when Man Yoo fell Cup victim at Dean Court. Debts multiplied. Redknapp boasted £848,000 transfer-profit (yes…a lot of money in those days). But wages turned that into £2.6m losses, a lot more money in those days. “The mess we are desperately trying to resolve,” said a club source, years later.

In 1997, Bournemouth became a ground-breaking supporter-owned club, 51% voting rights (the ‘golden share’) in a supporters’ ‘trust fund’ after they’d bought Bournemouth out of £5m receivership. But even if supporters’ mistakes came with the noblest intentions, they remained mistakes. By 2005, Bournemouth were £5m light again and had to sell assets, including a three-parts refurbished Dean Court (that’s when the money ran out), sold to property firm Structadene and rented back at…eek!…£300,000 p.a.

Bournemouth’s latest saga began in March 2007 when local businessmen Jeff Mostyn and Steve oooh-change-that-name Sly gained a controlling interest via a £750,000 share-purchase plan, enthusiastically backed by shareholders at an EGM. The Supporters Trust transferred their ‘golden share’ on the basis of this investment. A mistake, as we’ll see.

Despite considerable financial assistance, from Mostyn especially, it was always a case of when Bournemouth would file for administration, not if. Three ‘notices of intention’ were issued, protecting them from creditors’ attempts to get their money back, while new finances were sought. But, two months ago, HM Revenue and Customs (HMRC) issued a winding-up petition to reclaim £644,000 tax and £344,000 VAT.

HMRC had taken a hard-line with football clubs since losing ’secured creditor status’ – their right to full repayment – in 2003 (some phenomenally-paid players, often the root cause of administration in the first place, get their money by right, taxpayers have to make do with bits of what’s left…no, me neither). The hard-line was reinforced after losing £6m+ through Bates’ Leeds United manoeuvrings. This petition couldn’t succeed because of Bournemouth’s third ‘notice of intention’, filed when HMRC weren’t looking. But no new investment emerged, so Bournemouth entered administration anyway.

Like HMRC needed Leeds reminders, Elland Road ex-chairman and insolvency expert Gerald Krasner became joint-administrator alongside Julie Palmer, representative of ‘business recovery specialists’ Begbies Traynor. Palmer could have conducted business semi-naked (not topless, neither) and still been the low-profile one. Krasner introduced himself thus: “If somebody thinks they’re buying Bournemouth for £2, they don’t know me.” Everybody soon would.

Cynics suggested Mostyn was a shoo-in to buy the club ‘back’ (the inverted commas will be explained). The board’s favoured administrator was their own financial advisor, BDO Stoy Hayward’s Andy Beckingham. Mostyn preferred Krasner.

There were two other interested parties. The Bournemouth Echo helpfully explained administration to readers but less-helpfully induced collective-coronaries by declaring Luton ex-director John Mitchell, ‘involved’ in Luton’s recent ‘disputes’, as one party. The Mitchell was actually Dorchester Town majority-shareholder Eddie, whose business history wasn’t confidence-inspiring either, someone suggesting his company was called ‘Seven Developments’ after his seven…bankruptcies. He’d pass the ‘Fit and Proper Persons’ Test, naturally.

Within a fortnight, however, Mostyn’s credibility went bankrupt. The Trust discovered that his share ‘purchase’ was…a loan which, eleven months on, remained a loan. Director Eddie Battey explained that the ‘commitment’ was “without a specific timetable…there is only a marginal difference between loans in a company with few assets and money invested as share capital.”

True but, Mostyn-like, no-one was buying…AND it missed the point. “The issue was paramount” to the Trust handing over the ‘golden share.’ Some even questioned Mostyn’s authority to take Bournemouth into administration in the first place, right decision though it was. But Mostyn, and Sly, were undermined from then on. Whatever else they did for Bournemouth wasn’t enough.

Mostyn courted further unpopularity, squabbling with ‘Playershare’ – a company established to help directly with players’ wages. The administrators’ solicitors, Walker Morris, asked for Playershare’s raffle proceeds, a clumsy money-grab. Playershare, properly, refused and were told it wasn’t “appropriate that (they have) a presence at the club.” Mostyn hadn’t instigated this but insulted fans’ intelligence by suggesting they’d be “disadvantaged (into) believing they were helping the club.”

Mitchell (remember him?) claimed Krasner told him not to bid as “things were advanced with someone else.” Chinese whispers, this. Krasner told Mitchell’s solicitors to hurry up because things were “far advanced” after three weeks in administration. But suspicions that Mostyn had a ‘done deal’ were fuelled. And re-fuelled by revelations that Mostyn had ‘semi-exclusivity.’ His consortium could re-bid if they’d been out-bid, on the not-unreasonable basis that Mostyn was funding Bournemouth throughout the whole process.

Ex-president and major creditor, 81-year-old businessman Stanley Cohen allegedly made a £3m offer to Krasner’s face “with a cheque in my pocket.” Krasner insisted, as with everyone else, that Cohen sign a confidentiality agreement. Cohen, claiming he’d been advised not to sign, refused, none too politely. So Krasner refused the probably proverbial cheque. There was also a “mystery-Midlands-multi-millionaire “waiting in the wings”…where they wait to this day. And Redknapp was making noises, though that might just have been wind.

Mostyn’s was the only actual bid. On March 13^th, Krasner announced as much, remarking: “If you’re selling your house for £100,000…sorry, we’re in Bournemouth…£500,000 (HO-HO!) and £480,000 is the only offer, it’s the only offer,” inadvertently revealing that Mostyn had offered cut-price. This would be cut further if creditors didn’t accept Mostyn’s proposals for their re-payment – ‘Corporate Voluntary Arrangement (CVA).’ And a failed CVA was possible.

HMRC’s 17% of the debt garnered 17% of the vote, with only 25% required to block the CVA. 320 creditors were owed £5.8m collectively. And Mostyn’s and Krasner’s alienation of minor and major creditors (including season-ticket holders, owed for matches not played before administration) all-but-guaranteed the extra 8%. Only smaller re-payment and the spectre of points deductions for a failed CVA might have persuaded the disaffected.

Matters nearly didn’t get that far. Mostyn’s consortium now included previously-rival bidder, Dorset-based ‘international’ businessman, Marc Jackson – a “business strategy specialist…well-connected in football” or, to critics, a glorified photocopier salesman (LOTS of paperwork in administration). Relations with Jackson quickly strained. And before March was out, so was Jackson…for “contractual reasons”, i.e. Jackson was a Southampton-supporting fantasist who hadn’t produced the cash. Krasner said the bid “breached two agreements” – initial funding and proposed sale, in other words, everything.

Krasner addressed the April 7^th creditors’ meeting anyway. By then, two new, if familiar-looking bids had emerged, One was e-mailed at literally the second-last minute, which satiated Krasner’s dramatic instincts. The other was…Mostyn. Mostyn’s family had ‘persuaded’ him to walk away after the Jackson farce. But he walked back again, the ‘family’ thing not a sympathy-seeking stunt…oh no.

Both bids matched Mostyn’s original, so the CVA vote went ahead and was predictably lost. Krasner, though, was still able to announce a club sale to one bidder the next day. To both, actually. Mostyn was declared winner before “further clarification” revealed that…ooops…no, he wasn’t, his bid had “lapsed.” So the winner was…Marc-bloody-Jackson.

Except that Jackson was only a front-man for a company called EU-UK Limited. Actually, he wasn’t even that. EU-UK were unveiled at a press briefing from which they banned Jackson. “Proud to be a middleman”, he responded, downgrading his role. EU-UK were less proud, Jackson having announced grandiose plans and board structures for Bournemouth – “a forward plan for three years and money to deliver it.”

This appeared news to EU-UK’s four directors. Derided by the ever-present but not-unperceptive cynics as ‘”brickies and plumbers”, only Ian Mathison had been ‘in’ football – a partner in Glasgow-based agency Viola Management. But Jackson’s role was still “anything we decide…appropriate to Marc’s skills.” “Copy boy, maximum” critics sneered.

New director John Frost declared: “The money’s in place…its difficult to see what could go wrong.” His optician’s a charlatan. EU-UK asked for an extension to Krasner’s deadline for stumping up cash, to undertake ‘due diligence.’ Krasner granted it…if EU-UK paid £50,000 for the privilege, to fund Bournemouth through the delay. EU-UK refused and the deal collapsed, allegedly because the papers were still in Jackson’s name and Jackson wasn’t about to hand them back, instead threatening legal action over his sidelining. Back to square one…and beyond.

Krasner is hosting ‘interested parties’ (including Mostyn) again, with the first bid to pay a deposit gaining ‘exclusivity’ (last one in’s a cissy, presumably). Meanwhile, the team are unbeatable and may yet produce the greatest of escapes from relegation. It could be for nothing. Except that Redknapp said: “There’s no way I’ll see them go under.” And when has he ever lied?

‘MotorMurph’ is written by Mark Murphy

Entry Filed under: MotorMurph Column

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