Below is an html version of the Questionnaire handed out at the Bournemouth game on 8 May
Please return the completed questionnaire to:
Bees United, Griffin Park, Braemar Road, Brentford, Middx. TW8 ONT
If you have access to Adobe Acrobat Reader you can download a PDF version of the questionnaire that was handed out at the Bournemouth game on 8 May. Click here to download.
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Have YOUR Say on the Future of Brentford FC
Dear Member/Supporter,
We are writing to invite members’ and other supporters’ views on the future direction and ownership of Brentford Football Club (the Club). We would ask you to read the briefing note below and to complete the attached consultation form and return it to Bees United at Griffin Park before 31st May.
This note sets out the background to the Club’s current financial position and outlines seven potential ways of approaching the future.
Background
The Options Deadline
1. Lionel Road site for a new stadium
2. Relaxation of S106 planning conditions on Griffin Park
3. Full Refinancing
4. Partial Refinancing
5. Share Issue
6. Business Consortium
7. None of the above
Have Your Say
Background
As most fans will be aware, the majority shareholding in the Club was acquired by Ron Noades from David Webb in June 1998.
At that time the Club had minimal debt, and was funded by £500,000 of directors’ loans. However, bank borrowings soon began to grow reaching over £3.5m in the first two years to 31 May 2000 and up to the current overdraft limit of £4.5m by the end of 2002.
Following the acquisition of the Club by Ron Noades’ company, Altonwood, the Club company was renamed Griffin Park Stadium Limited (GPSL) and the net assets of the Club excluding the stadium were transferred to a new company, Brentford FC Limited (BFC). When the beneficial ownership of the stadium was subsequently sold to BFC, together with the transfer of the original director loans of £500,000, a further debt obligation of £1.3m was created (i.e. BFC now owes £1.3m to GPSL).
As a consequence of these activities, the debts of the Club are approximately £7m comprised of approximately £6.5m of loans secured against Griffin Park stadium and a further £500,000 of unsecured loans and creditors.
Following the recommendation of a government taskforce on football governance, a national organisation, Supporters Direct, was formed to assist football supporters in having a greater say in the way their Clubs are managed. Bees United, the Brentford Supporters’ Trust, was formed in April 2001, with the assistance of Supporters Direct, as an Industrial and Provident Society.
In February of the following year Bees United negotiated a six month option to purchase Altonwood’s shares, and John McGlashan (the Bees United chairman at the time) was appointed as a director of BFC.
The strategy developed for resolving the Club’s financial problems is the acquisition of a site in the local area for the development of a modern stadium that is capable of generating the revenues that will sustain the Club in the future.
Bees United have been actively pursuing the acquisition of a site at Lionel Road for a period of more than two years, and expect the process to take up to five years, if successful.
Altonwood and Ron Noades have declined to support any further increase in the Club’s overdraft facility. Initial projections prepared by the Club for the 2003/2004 season indicated the limit would be substantially breached during the course of the season. Consequently, an approach was made to Bees United to fund the projected losses; the alternative was to place the club in administration as stated in the Chairman’s report on the 2003 accounts.
The initial Bees United option expired, but a new one was agreed last year to acquire Altonwood’s shareholding in both BFC and Griffin Park Stadium Limited (the company that is owed £1.3m for the ground). To exercise this option Bees United have until the end of May 2005 to pay off the overdraft or put alternative financing arrangements in place.
A number of board changes resulted at the time this option was agreed. Ron Noades resigned as Chairman and director at the end of March 2003 and two members of the Bees United board, Stephen Callen and Andrew Wainwright joined the BFC board.
At a BFC board meeting in April 2003, John McGlashan and Stephen Callen were appointed executive directors responsible for the operational management of the Club. Subsequently, Doug White also joined the BFC board with a remit to progress the new stadium plans at Lionel Road. John, Stephen, and Doug also joined Martin Lange (the Club’s former Chairman, who holds a veto on the sale of Griffin Park) and John Herting on the board of GPSL.
Bees United have funded the club to the tune of over £200,000 in the 2003/2004 season on top of the £125,000 funded through 2002/2003, and expect to be able to loan up to £150,000 to the Club during the course of next season.
The Bees United representatives on the BFC board are in contact with Altonwood and the Bees United board are currently reviewing the means by which the option to acquire the shares might be exercised. Back to top
The option deadline
The option deadline is the end of next season – 31 May 2005. We therefore have only twelve months to carry out complex negotiations, and secure robust financial backing, to create a viable future.
Seven possible approaches
In order to inform its strategy, Bees United is seeking the views of its members, and other Brentford supporters, on the various approaches that might be pursued. None of these is entirely within Bees United’s control, and all are dependant on negotiations with other parties – they may or may not be feasible! The seven approaches outlined below are not mutually exclusive, and a combination of two or more of these alternatives may be appropriate as circumstances dictate.Back to top
1. Lionel Road site for a new stadium
The current Bees United strategy is the acquisition of a site in Lionel Road for a new stadium. The acquisition of a new site would meet a key condition of the currently proposed planning consent on Griffin Park for residential development. Bees United is in discussions with commercial property developers to explore the potential for commercial enabling development on the site to generate sufficient value that, together with the sale of Griffin Park, could unlock the finance required for a new stadium, and repayment of the club’s £4.5m overdraft. Back to top
2. Relaxation of S106 planning conditions on Griffin Park
The strategy favoured by Ron Noades’ company, Altonwood, is the relaxation of the planning conditions on Griffin Park to potentially provide for an increase in its value, sufficient to cover the existing overdraft without the benefit of Ron Noades’ and Altonwood’s guarantees.
The Bees United board remains opposed to any sale of Griffin Park without a site for a new stadium having been secured, but does support the relaxation of some conditions in order to increase the value of Griffin Park, and help with the financing of a new stadium.
To entertain this proposition, the Trust would have to be reasonably satisfied that the Club was sustainable in the long term after any refinancing, and that safeguards were in place to avoid a sale of Griffin Park before the acquisition of a new site. Back to top
3. Full Refinancing
A refinancing of the Club’s current overdraft is fraught with difficulties. The planning restrictions on Griffin Park limit the collateral security that is available, and football clubs generally are a high risk venture for lenders. They come with potential public relations problems, and the recent history of trading losses at BFC do not make it an attractive proposition.
The appointment of new directors and management has arrested the severe losses of the past few years and it is expected that the club will get closer to breakeven this season. While the rush towards oblivion has been stopped, there is still a long way to go to put the Club’s finances back into a healthy condition.
Any refinancing of the current bank overdraft under these conditions is likely to increase the interest cost burden on the Club and extract a significant chunk of any future proceeds from the sale of Griffin Park. It may also leave the club in the potentially precarious position of having to sell Griffin Park to meet future debt or lease rental repayments before a new site has been secured. Back to top
4. Partial Refinancing
The current bank overdraft of £4.5m is secured against the freehold of Griffin Park and supported by the guarantees of Altonwood and Ron Noades. The bank have required Altonwood to maintain £2m on deposit with them as cash cover against the overdraft in addition to the guarantees.
Bees United believe the Trust could continue to cover the interest cost on a £2.5m overdraft with the current bankers, Barclays, for an extended period of time. To make this a workable proposition, Bees United would need to negotiate with Altonwood to transfer their £2m deposit directly to the Club, and defer interest and capital repayments until the Club was in a position to meet the payments; whether by sale of Griffin Park, surplus income from a cup-run, player sales, or play-offs, and/or additional fundraising by the Trust. Back to top
5. Share Issue
Some supporters have indicated a preference for a share issue. In looking at the experience of other clubs this does not appear at first glance to be a viable avenue for Brentford at present. Ipswich with 18,000 season ticket holders recently attempted to raise £5m and achieved just over £1m at a cost of £285,000 in legal and professional fees. Norwich with a similar supporter base raised £500,000 just before Christmas while sitting at the top of the first division. Watford when faced with administration raised £600,000 from their share issue and were forced into a £6m sale and leaseback of their stadium. AFC Wimbledon were able to raise just over £1million with virtually every fan a member of the trust and on the back of a first year profit of £200,000.
A share issue is likely to cost £100,000 to £150,000 to get off the ground and could only be reasonably undertaken with under-writing of the costs by one or more wealthy benefactors, with no guarantee of success! The amounts raised are unlikely to make a significant dent in the overall debt, but this option may be viable as part of an overall debt refinancing, and may become more feasible if the new stadium plans come to fruition. Back to top
6. Business Consortium
A business consortium involves Bees United partnering with a group of high net worth individuals able to furnish direct investment or guarantees to the Club without any expectation of a financial return, and in particular with no designs on the Club’s principal land asset.
As you might expect, such persons are not easy to find but this approach has been successfully employed at Chesterfield and remains a distant possibility.
7. None of the above
Ron Noades invited Bees United to assume control of the Club on the basis that his advisors’ projections indicated that the club could not operate at Griffin Park beyond the 2002/2003 season without substantial ongoing funding support, and in the absence of the Trust assuming control he and the board of directors would have no alternative other than to put the Club into administration.
The progress made during the course of the last year proves that assumption to be incorrect!
This last alternative then (in the absence of a new stadium site by 31 May 2005) is to allow the option to lapse and return the Club to Altonwood, with operating costs under control, and with the protection of the S106 restriction (which requires a new site before Griffin Park can be developed) and Martin Lange’s veto on the sale of Griffin Park still intact.
While this may be a disappointment for members, the first priority of Bees United is to maintain the Club, and not to seek majority ownership at any cost.
Given the complexities of the current situation, none of these seven approaches, or any combination of them, would be straightforward. Finding a solution to the financial challenges is, however, the most pressing priority in order to secure a viable long term future for the Club.
It has never been more important for all supporters to work together. We would like to hear all of your ideas and opinions.
Joe Bourke
Bees United Finance Committee, 5 May 2004
Please send us your views on the future of Brentford Football Club
Please indicate your preferences by marking your choice in numerical order after the relevant statement (from 1 to 7) for each alternative and use the space at the bottom for comments or attach an additional sheet.
If you think more than one of the approaches (eg Lionel Road and Relaxation of S106 conditions) should be pursued together you can allocate the same preference to each.
1. Lionel Road site for a new stadium
2. Relaxation of S106 planning conditions on Griffin Pa
3. Full refinancing
4. Partial refinancing
5. Share issue
6. Business Consortium
7. None of the above
Comments:
Are you a member of Bees United
YES
NO
(please circle accordingly)
Please return to:
Bees United, Griffin Park, Braemar Road
Brentford, Middx. TW8 ONT