By Jason McKeown
After the optimism of Saturday’s five-star Bantams show, news has broken today – via education message boards and then Twitter – that the planned Valley Parade primary school within the old club shop has fallen through. The Financial Times has since reported that the school’s opening will be delayed by a year (link here but you need to register for FT.com to read it). The Department for Education (DfE) has apparently refused to provide the funding needed, due to a lack of student uptake (only 60% of places filled, parents of these students will now have to find another school). The school was due to be opened next week.
The significance for Bradford City? Potentially huge. Potentially very damaging. The club had agreed a deal reportedly worth £2 million to sell the office blocks to the charity One in a Million, who were opening the school. Without the shortfall in funding that DfE were expected to provide, it would appear – those it is unconfirmed at the time of writing – that the sale may not be completed, at least for the time being.
In case you’d forgotten the back story. One year ago, the two families who own Bradford City – the Lawns and the Rhodeses – agreed a deal with Prupim, who owned the office blocks, to buy back the property the club had sold along with Valley Parade itself back in 2003. City had been forced to rent these premises for around £370k a year as a result. This, along with a similar amount paid to the Gibb Pension Fund to rent Valley Parade, was hindering the club’s ability to progress on and off the field.
Last summer, Mark Lawn and Julian Rhodes attempted to renegotiate the rent on Valley Parade, only to find Gordon Gibb unwilling to budge on the 25-year lease commitment. But they managed to agree a deal with Prupim, and bought the office blocks for a price that Land Registry records show to be around £1.3 million. Lawn even took out a second mortgage on one of his properties to help fund the deal. The two families formed a new company, BC Bantams Limited, rather than the club itself taking ownership of these premises. Other local businesses were invited to rent small offices within the building, which BC Bantams Limited could benefit from. A small – but very fair – return for a considerable outlay. Meanwhile City no longer had to pay £370k a year for these premises.
The subsequent deal with One in a Million to sell these premises looked to be a masterful stroke of business acumen by the two chairmen – making a considerable profit just 12 months after the initial outlay, while removing this rental burden from the club forever. That it has been delayed or fallen through is in some ways not the end of the world; though it’s likely those small businesses contributing rent will have moved on already and so – if the school deal is dead or not completed for a year – BC Bantams Limited are left with an empty building. It should not be impossible to sell the property to another party, though perhaps not for as good a deal as the One in a Million school initiative was set to provide.
But it gets worse. On numerous occasions this summer, the two chairmen have gone on record stating that the close season spending by Phil Parkinson was largely being funded by the expected proceeds of this sale. The biggest playing budget in four years, which has been used by Parkinson to bring in a host of talented players. If this deal is dead or delayed, there could suddenly be a huge shortfall in City’s forecasted financials.
From where it looks right now – and hopefully the next few days we will find out otherwise – it appears City might have built a team that we cannot afford.
Whether this leads to immediate cut backs and player sells is unclear. The chairmen have committed to this spending before the office/school deal was completed, and you would hope that they did so knowing there was a chance it might fall through or be delayed. You’d hope there is a plan B, and that either the two chairmen were, and are, prepared to fund this revamped squad from their own back pocket. Pinning all plans on a school deal that was not signed and sealed would be naive. We do not want to believe the chairmen have been naive.
Nevertheless, at this moment in time, there is a worry that we have some unexpected early season problems. And everyone will be keeping a close eye on the club’s reaction to these developments. Before a ball was kicked this season, it seemed clear that Bradford City were gambling on promotion and that this could lead to problems if things don’t work out come May. We can only hope that the level of gamble is not too great, and that we don’t come to regret it so soon.