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Question of the Week
How long before new manager arrives?
John Fenty Speaks Out About The Current Crisis!
By: Bill Osborne
JOHN Fenty today responds to the questions asked about the current financial situation, the causes, the effects and the possible solutions. He has been forthright and honest in his replies and emphasises the seriousness of the situation.
These were the questions put to John, which were the main questions being asked by fans and supporters regarding the situation.
The Club is a community asset belonging to the public and, but for a minority, generally people wouldn't expect John Fenty to provide unlimited financial support to the Football Club.
John says neither the board nor he had set out to own this Football Club nor does the Board or John intend to give unlimited financial support.
Following the collapse of ITV Digital and NTL in April 2002 the club lost 55 % of its income over-night without warning, approximately Â£2.5 million. The compound effect of that over two years of course is double.
With virtually no opportunities to reduce football contracts and therefore cut costs over the following two seasons, our plight without any football fortune was somewhat inevitable. In the next few days the club will release a time line of financial details to show this more clearly.
The club intended to pay a Â£330,000 instalment of the tax debt in 2003 via a promised loan extended to all ex-First Division clubs from the Football League. The League reneged on this promised loan, informing the Club in a letter dated the 15th December 2003.
The club opened dialogue with the Inland Revenue regarding this tax debt in early 2004 which lead to a meeting in May 2004, when the club had a face to face with the Inland Revenue at its Head Office.
After that meeting, the Inland Revenue wrote to the Football Club agreeing to a moratorium lasting up until October 2004, by which time the Club would make a proposal to pay off the tax debt. The moratorium was subject to continuing to pay current obligations, which the Club continues to do.
In April 2002 ITV Digital and NTL defaulted on their Football League obligations. The club had a manageable financial situation up to this point. Debts increased as a result of the high costs of the playing contracts that could not be renegotiated. After April 2002, this debt was bridged by Director loans and, latterly, the tax debt that now cannot be paid.
Free of unaffordable football contracts that had been negotiated pre the collapse of ITV Digital in April 2002, the board have been able to restructure within a strict framework of balancing income with outgoings. Thus the Board are confident of operating the company as a going concern.
The tax debt is all associated with Pay as You Earn liabilities and National Insurance contributions.
There was an article on The Fishy website on 22nd May 2004 referring to the Football Club having a tax debt of Â£500,000. Broadly speaking the article was right.
When I became Chairman on 29th July 2004, I did report that the Football Club had debt from the past, and for it to be satisfied we would need some football fortune.
With a strategy to balance the books, a decent Cup run alone could well have solved the tax debt.
The Inland Revenue agreed to a moratorium lasting up until October 2004 before we had to respond. It is for this reason we had time to see what we could achieve without worsening the club's debt position.
The current debt is approximately Â£720,000. The fund needs to reduce the capital as soon as possible. We are advised interest is accruing on a day by day basis.
To detail the board's thoughts at this stage may adversely influence any further negotiations with the Inland Revenue.
Administration is an option; however there is no certain outcome to administration. There are no guarantees that the football club would survive an administrative period.
Administration invokes an automatic deduction of 10 points and could affect the club's Divisional status, which would have knock-on effects to income.
No. The Directors are not avoiding administration to protect their loans in the Football Club. In fact the Directors would have a choice to either file as a normal creditor or alternatively they can opt to leave their loans in place, effectively rolling them over.
We would prefer not to divulge the exact detail or nature of the offer as it might prejudice any further negotiations. The Club's proposal to the Inland Revenue was one that would not materially damage the restructuring process to rebuild the Football Club following successive relegations.
The Board believe that there is an opportunity to negotiate further although the Revenue has clarified certain points in writing. We have requested a meeting with them in the near future.
It is very important for Grimsby Town that we negotiate an affordable solution. The Board remains very hopeful they can do this for the Football Club.
The Revenue showed sympathy over the catalogue of financial difficulties faced by the Club over the last three seasons by agreeing to a moratorium lasting up until October 2004. We then had further dialogue and presented our offer.
A counter offer was received from the Inland Revenue on the 22nd December 2004. The Revenue's proposal was unaffordable by the club alone, at which point the board were compelled to inform the public.
The Chief Executive of the Football Club is to take advice and set up a Trust Bank account. The objective of doing this is to prevent any money received to purchase shares going to the Football Club unless there is an overall solution negotiated with the Inland Revenue.
Also if the club was forced into administration, that the administrator would not have access to these funds.
The support this season has been excellent. Encouragement of your friends and relatives to attend the remaining games, will both help the finances and at the same time, have a positive affect on the players as we bid to climb the league.
The Manager is always looking to improve his squad and allow players to progress their careers.
Where players do not figure in the short or long term plans of the Manager, naturally we as a club, look to limit costs.
Soon after announcing the Inland Revenue's position, Dave Otter the Chairman of the Grimsby Town Supporters Trust contacted us to ask if the GTST could help.
Dave and his team have been extremely helpful; we have discussed many initiatives which will be announced over the next few weeks.
GTFC will work together with the GTST and intend to brand this campaign.
This site is by the fans, for the fans, and we will consider articles on any subject relating to the Mariners whether it be related to current news, a nostalgic look back in the past, a story about a player, a game or games in the past, something about Blundell Park or football in general. Click here to submit your article!
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