TerrasBlog 09/06/09 - The club is on the brink again

Weymouth Football Club yesterday released a statement confirming many peoples concern about the state of finances at the struggling Blue Square South Club.

Relegation was always going to be costly. But as the statement confirms, club creditors are starting to turn up the pressure. 

Statement from the Board of Directors of Weymouth Football Club

In line with its policy of being open and honest with supporters, shareholders and stakeholders, the club wishes to update everyone about its current situation.

As a new board of directors, we believe we have done exceptionally well to get this far over the last few months. Frankly, the club was a mess and some of the deals it had entered into beggared belief as it ran up debts of more than £500,000 in little over a year.

On the plus side, we inherited share money of around £38,000 and as a board put in about £40,000 ourselves. This kept us going to the end of the season and paid off certain serious debts that threatened to close us down, along with staff wages owing for two months.

A large part of the money also went towards the first instalment of paying those 10 ex-players who left the club and had not received their wages for January and February. It was not their fault, but they were on contracts that the club should never have agreed and which were never going to be sustainable.

We then started making plans for a new, more affordable campaign. We hired a new manager and his assistant and asked them to recruit a part-time squad for next season for a wage bill of about a third of last season’s budget.

So far Matty Hale and Andy Tillson have worked wonders in starting to assemble a team of bargains who will be hungry, enthusiastic and competitive.

It is all part of a business plan that is very manageable for next season, involving us paying off creditors and breaking even. We have been gratified that sponsors are willing to come back to us and give us another chance as they see a new regime more open to their needs.

The problem is not the longer term but the here and now. Over the summer, the club is experiencing cash-flow problems that it is seeking to address but life has been made very difficult for us, sadly, in the past week.

One big issue is that Barclays Bank have decided to foreclose on us, requiring that we pay off our overdraft with them very soon. This has come as a serious and unexpected blow just at a time when we hoped our creditors were giving us some leeway, with the Inland Revenue having agreed a payment plan.

On top of that, the former chairman Malcolm Curtis is demanding repayment of certain of the money he believes he is owed by the club and is threatening us with legal action.

This has placed us in a difficult position. We are in this situation because of decisions taken by Mr Curtis and his chief executive Gary Calder and have been endeavouring to put the wrongs right.

It therefore seems ironic, we believe, that Mr Curtis, having allowed this situation to happen, now then expects an instant solution to his benefit.

This at a time when the club’s traditional source of summer income, such as speedway and car boot sales, now go to him. In addition, he has franchised out the bars and catering.

The new board has always wanted to do the honourable thing and pay the club’s creditors, rather than default. We also do not want to have to have to suffer any punishment, from points deduction to expulsion from the Blue Square Conference, should we be forced into any insolvency action.

We are working tirelessly to find new sponsors and investors to avoid such action and have had countless meetings over countless hours to keep the club afloat thus far. The meetings will continue this week.

One problem is that due to the previous chairman having sold himself the land surrounding the Wessex Stadium, we no longer have any collateral to borrow against. Indeed, we are looking at legal action to recover monies we believe the club might well be owed from previous officers in charge.

In the meantime, we will keep seeking help as we try to raise the money that will keep the wolves from the door this summer. It is not helping that certain concerns who owe the club money are not paying their own debts.

One initiative we hope to put in place is the launch of a new mobile phone texting helpline in the next week which should yield us some revenue as we hope people respond with donations.

We also hope that those people who a month or two back were willing to save the club and pledged to buy shares, but have since not followed through their support, will now step forward.

The club will survive and will start next season no matter what, we are sure. We must, however, quickly find the necessary funds to continue to repair the damage suffered by the club.

Malcolm Curtis however has told the Dorset Echo that he isn't using bullying tactics to get money back and that this was an agreed payment.

 “I’ve not made any statutory demands. When the board took over they signed an agreement that £20,000 of money owed to me, which I put into the club before Christmas, would be paid back at £500 a month.

“However, no payment has been made at all – I’ve not received a penny. I’ve had no contact from the club to clarify their position so all I want is clarification.

“I’m not going to wind the club up as I have no intentions of doing that. They signed a legal agreement with me and I just want clarification on the situation so we can move forward.”

 So all as clear as mud then, and the one thing that is for certain is that the honeymoon period for the new owners has ended and unless this gets sorted out we are in for another period of sniping and back biting. 

I for one dont think the club could survive that...