City: AGM
The conclusions I draw – as a shareholder - from what I have seen today are:
• Peter Ridsdale has put in place a more professional approach to the management of the club
• The club is committed to making the stadium happen, and a lot of work is going on behind the scenes
• Costs have been brought down significantly
• We are probably still spending beyond our current budget, as attendances are below the budgeted figure of 13,000
• We are not out of the woods yet – the period to 31 December will be very important in terms of the stadium development
• If attendances do not improve, then we could lose players in the New Year. (Those who read Mike Morris’s website may have seen the message-board post from Corky of Valley Rams last night which said of the gates ‘the reality is if they remain at this low level we could be in danger of losing players.’) (UPDATE Friday 16th September: Today's Echo now reinforces this point, again quoting Sam from the AGM.)
Click below for the detail.
The Platform consisted of Company Secretary Peter Lloyd-Cooper, Tony Brown, the new Finance Director (FD), Directors Jonathan Crystal, Steve Borley, Sam and Peter Ridsdale. Peter Ridsdale (PR) chaired and ran the AGM professionally, openly and smoothly. He began by asking for questions. I asked about the position of the stadium, since the auditors drew attention to its importance in the accounts for the year ending May 2004; and also about whether there were plans for a further financial restructuring, as the Directors’ Report suggested might take place after May 2005. (Recognising that there had already been some restructuring, with PR joining and the new FD.)
PR replied that the Board was confident that the stadium would happen, with Capital and Regional or with someone else. The agreement with Capital and Regional (C&R) and the Council could be ended on 31 December 2005 if developments had not been taken forward, but the club remained confident that they would go ahead with C&R. Unconditionality would be given by C&R when they were happy with developments. In terms of finances, the long-term debt position was secure until 31 December 2011. Some loans were owed to directors which became payable at 31 December 2008. With the new FD in place, the Board would be considering whether it needed a financial restructuring.
Other shareholders asked questions. A shareholder called Gary asked about the timetable for work starting on the stadium. PR said this was hard to say, but they were confident about the stadium development because the planning consents were ‘very very good’ and the stadium plan was ‘outstanding’.
Steve Perry asked about the growth in wages and debt since 2002. PR said that the accounts for the year ending May 31 2005 would be out shortly, and he didn’t want to pre-judge those, but these would show that the debt continued to grow but also that the wage bill had reduced substantially. The club’s objective was to operate at break-even level.
Jim Payne – also a season-ticket holder for 60 years – asked whether the directors who had left had retained their shareholdings. PR confirmed that they did.
Martin Bowdrall (not sure about the surname) asked about the £24m loan and whether it was secured or unsecured, PR confirmed that this was unsecured. (The club confirmed this to me in their April letter).
PR clarified the situation with the ground. The council remained the owner of the lease. PR thought there was about 34 years to run on this. Redrow had an agreement to acquire the lease and would make a payment into the Project fund for the new stadium at the time City surrender the lease to them.
John Atkinson asked about the recent suggestion that the Council wished to impose a deadline on the development. PR responded by saying that the club believed that the deal would go unconditional by the end of the year. The club was in partnership with the Council and with C&R. He would be surprised if the Council would want to go it alone, as (a) it would obviously cost them more money than working in partnership and (b) they needed the cooperation of the Club to make the stadium work.
The resolutions were passed and also PR was re-appointed as a director.
After this, Sam then spoke for almost 15 minutes non-stop. I will summarise:
• He said we had ‘a damn good club here’ and he expected it to grow and play in the top echelon. He reiterated that as the club grew, it would need to attract people who didn’t now come to football games.
• He reiterated his commitment to Wales, saying ‘I am disproportionately into this Welsh thing’: he saw the club as ‘a Welsh crusade’: he believed it could demonstrate the ‘power and ability of the people of Wales and what they can do’. It could be a ‘feel-good factor for the Welsh people’.
• He would be flabbergasted if the stadium didn’t go ahead. The stadium saga had been ‘soul-destroying’, especially for him and David Temme. People with weaker personalities would have thrown in the towel. A new stadium was key – look at the progress made by clubs like Wigan, Reading and even Swansea with a new stadium. It meant extra income for the club.
• They had had to restructure the team. Even with Earnshaw, Kavanagh, Thorne and Gabbidon the best the club had done was come 13th. They had put money behind a manager who had twice taken clubs to the Premiership, and funded high wages. No-one could fault the club’s ambition.
• He complained of the internal politics that had existed within the club in the recent past.
• Originally they wanted to cut the wage bill to £4 million. They had got it down to £2.5 million before new players came in. They had exceeded their initial budget but had then sold more players.
• He was concerned that the fans did not share the ambition of the club, with only 9,000+ turning out the other night. They had budgeted on 13,000 – every 1000 on the average attendance meant £300,000 per annum to the club. If average attendances were 10,000 rather than 13,000, then the club was worse off by nigh on £1 million. He warned that if the stadium had not made progress by January, and if the attendances continued to be low, then he would have to make a decision on some of the key players at the club.
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