The club’s in the black, and so too is Mark Lawn

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By Jason McKeown

There was – typically for the Telegraph & Argus – a wholly positive tone to this week’s announcement that Bradford City made a £1.5 million profit for the 2012/13 season. Undoubtedly it is a significant achievement that rightly should be applauded. The club took what David Baldwin described as a “calculated risk” with the budget last season, a risk that was handsomely rewarded.

Indeed it is worth recalling the consequences of what that gamble failing might have been. Baldwin explained that the club committed to a playing budget £600k higher than it could afford, with four variants identified as offering the potential to recoup the deficit if it was required to be made up.

One of those – the selling of the former club shop to the One in a Million charity, who were opening a school – appeared to be in doubt when the Government ruled the school’s opening must be delayed. The other three variants were City going on an unbudgeted for cup run, re-negotiating clauses agreed with clubs who bought some of our youth players and selling members of the current squad. The cup run more than ensured that there was no need to consider the more troubling variants three and four, and eventually the school deal went through – further boosting the coffers.

A great story then and one that the club’s owners can feel rightly proud of. Two summers ago there was talk of leaving Valley Parade and suggestions of big financial problems if the status quo was maintained. Firstly, there was the excellent move to buy the club shop from its landlords Prupim, to halve the £600k+ annual rent that City were forced to pay. This deal was carried out privately by Mark Lawn and the Rhodeses with no little risk to their capital – the successful sale of this land to One in a Million, for a profit, demonstrating excellent business acumen.

Now we can reflect that the calculated risk agreed last season was also a sound decision. Phil Parkinson had the resources to build a promotion-winning squad, the variants identified paid off and the club made a profit beyond their wildest expectations. Just as faith in Julian Rhodes and Mark Lawn was beginning to wane, the pair have demonstrated they have the ability and know-how to take the club forwards.

So all great then? Well, nearly. But not sitting entirely comfortably are the details surrounding the news that Lawn has been paid back the £1 million he loaned to the football club in 2008, details completely ignored by the T&A. Under the terms of the loan agreement, Lawn was been paid annual interest 9% above the Bank of England Base Rate. Since March 2009, Base Rate has remained at the historic low level of 0.5%, which means Lawn was apparently earning a return of 9.5% – or £95,000 – per year.

Four seasons on Lawn has been paid his money back and, according to the T&A, received the interest owed. The exact details cannot be known, but it would appear fair to estimate that Lawn has earned something between £380,000 and £437,000 in interest. This is a tidy profit, which he’d have done well to have made in a different manner, such as investing.

You can, valued reader, form your own judgement over whether this personal profit is agreeable to you or not. Many have argued – accurately – that City would not have found a more favourable interest rate from borrowing this money from elsewhere. Their credit record, on the back of two administrations and regular annual losses, would have made it difficult to raise the capital in the first place – especially as 2008 was the year of the credit crunch and of big name banks requiring tax-payer bailouts. Lawn – who had already invested £1 million 12 months earlier – loaned part of his children’s inheritance when others would not have. So kudos for that.

Yet the issue for me is the belief held that, without the loan, City would not be here today. The money was loaned to the club at the start of the 2008/09 season to fund a gamble on promotion under Stuart McCall, with a £1.9 million playing budget handed to the former City manager. Lawn’s loan was to cover this shortfall, but it was from this point that the club got to a position, two years later, where it was paying players late and talking of ripping out the Valley Parade seats and moving them to Odsal.

Lawn’s loan may indeed have been vital at this time, but the decisions that he and Rhodes made had led us to the point where it was vital. In addition to this capital – £700k of which had been spent before last summer, according to Baldwin – the sell on bonus clause from Fabian Delph moving from Leeds to Aston Villa and George Green’s move to Everton were clearly crucial.

Ultimately, the club’s gamble in 2008 did not work and there was less of a solid plan considered for the consequences of failure, compared to this time around. Lawn’s £1 million loan was a risk on his part – had City gone into administration, he would have been at the back of the queue of creditors – and so it is understandable he sought to ensure he was rewarded for that.

But still, it looks like a big profit…

The point of this article is not to criticise Lawn, or indeed any member of the Board. It’s just that, perhaps, the deserved recent praise for his business acumen is slightly to the detriment of his reputation as being a huge City supporter.

Were me or you in a position of Lawn to loan Bradford City £1 million – bearing in mind your loved ones could lose a chunk of their inheritance if it went wrong – would we be willing to do so and, if so, would we want the type of assurances Lawn agreed? It’s easy to get on the high horse and say we’d want no profit because we love the club, but sadly we will probably never get the chance to find out what we’d really do.

The comparison with Rhodes – somewhat ludicrously rarely celebrated for being a City supporter – and the sacrifices he and his family have made are there to be made. Once the recipient of regular, lucrative dividend payments, Julian re-invested it all and re-mortgaged his home to rescue the club. In contrast Lawn is a richer man for his second £1 million investment at least; and if he was ever to sell his 49% stake in the club he would expect to receive his first £1 million back too.

I have mixed feelings about it, but perhaps overall we should be positive about this development. Lawn has re-established his popularity amongst fans after a successful season, and deserves to share some of the praise for how well things went, due to an improved calculated risk strategy that he helped to implement. When he was less popular, the defence offered by his supporters was that at least he was a City fan – one of us.

If Lawn has made a profit for himself, he has done so whilst delivering a profit for City and taking us forwards. And I like going forwards. And I prefer thinking of Lawn as a successful football club owner than I do thinking of him as unsuccessful one whose failings we overlook just because he is a passionate City supporter.

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Categories: Opinion

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21 replies

  1. Good argument both sides there Jason and a very fair article.I am not one of Lawn’s natural supporters but fair do’s; he put the money in when that kind of funding was very scarce and if he got rewarded for the risk (and it was a big risk), then so be it. Difficult to argue with the regime at the club now; a great job done by one and all (and I have been a big critic in the past). Just wish they could stop Lawn on the PR front; he is not good at it and needs to leave it to others better equipped.
    For the first time in years we have a pre-season with a decent squad, good manager and some decent momentum;Lawn deserves the credit for that as well.
    Can’t wait for Ashton Gate on the 3rd!

  2. Very good article and agree it provides an insight of both sides of the argument. I do believe though had David Baldwin not come on board and steadily become more involved in the club, there is an argument to say that there would have been no ‘calculated risk’ this season. I also question how much Rhodes and Lawn input in the daily running of the club these days. I really do think without Mr Baldwin (coinciding with Parkinson’s arrival,) the club would not be in the position it now is. It is my opinion that Mr Baldwin’s business acumen is more valuable than Lawn’s loan was. As stated in the article, Lawn’s loan is likely the reason why players wages were not paid on time and the threat of leaving Valley Parade arrived, due to an increased budget, but a budget spent without any sort of back up plan.

    Through good management on and off the pitch the club is looking like it has some value to it’s name. The club has made a substantial profit and has salable player assets. The image of the club has improved and is more professional. Baldwin and Parkinson appear to have changed Lawn’s hands on approach. It does seem that Lawn and Rhodes have taken a step back in the daily running of the club. The main thing though is that the club is moving forward and the only creditor left is Gibbs and his pension fund. Hopefully one day we will be in a position to buy back the stadium.

    • At the risk of speculating it has indeed been strongly hinted to WOAP – by various sources – that the day-to-day running of the club, since the summer of 2011, has been handled by Julian Rhodes and David Baldwin and Mark Lawn has taken a backseat.

      I fully agree about David Baldwin. He is doing a magnificent job and is clearly very influential.

  3. I don’t really know where to start with my response. I tweet Jason, I know of Jason, and I therefore know he’s a salt of the earth type guy who’s just had his first child, so should be really mellowed at the moment. He’s also intelligent and articulate.

    That makes this article confuse me more.

    Our club is riding the crest of a wave. Positivity seemingly cannot be diluted. Even the T&A message board met the news of the paid back loan with a general feeling of, albeit begrudgingly, gratitude to Mark Lawn.

    Yet, despite the ever present clever wording and balanced text, this is a negative article. A negativity I really don’t understand.

    Mark Lawn chose to lend the club money at a rate the club agreed. When I say the club I mean his fellow Chairmen and Directors. He did so at a serious degree of risk. A risk reflected by the percentage interest rate applied. It is worth noting that the percentage interst rate applied is pretty much standard in any partnership, directorship etc. Nearly every business investment loan is supplied at a percentage above BOE base rate. This is not unusual. The reason being that if any business needs a cash injection then they are struggling, either constantly or at that time.

    I’m not teaching people to suck eggs but if you turnover £1 million and your costs are£500,000 your quids in. If your costs are £2 million you need cash fast. And if your outgoings exceed your income you’re getting it wrong in the first place. So, it’s a risk to give a loan.

    Yet, Mark did. We are told with his children’s inheritance. I don’t know if this is right or not. But either way its a sizeable sum to a modestly wealthy man- in FL Chairman terms. Lets say ML is worth £5 million. I really don’t know what he’s worth and not do I believe newspaper articles. He invested a fifth of his wealth. With the major possibility it would never come back.

    I openly ask, without any prejudgment, would the man on the street give £4000 of his £20,000 PA to city to fund a promotion push? I very much doubt it.

    Cash is relative. The analogy works perfectly. A fifth is a fifth.

    What also upsets me for the board, and in particular ML, is that they get no credit.

    Andy leaves a great comment about David Baldwin and PP. He’s spot on about their credentials. But again no credit where due. Who employed PP? I shall tell you it was ML. I remember sitting on holiday when Jacko was sacked and rushing to the Internet to get the news. Barbed comments sung out from message boards, ” Mark Lawn wanted PP” ” Personal choice of ML” ” Whats he playing at”? “Meddling again”.

    Since going into athe bottom tier what have ML and JR done to stop the rot? Employed the club legend as manager and given him a massive budget. Attracted an ex England Manager. It didn’t work. So they turned to PP and got it right. Trying and trying and trying. And then like the fable says, if at first you don’t succeed……….

    David Baldwin. The shining light of the club. Who employed him? Who was his mate? Oh, yes, ML again. With Megga the terrible trio!!

    Come on people credit where it’s due. He says some right Stuff. He fires from the hip. Accepted. But that’s passion. Support. Love for City. He’s a fan. Give him a break.

    Viva Lawn and Rhodes.

    • Hi Ben

      As I attempted to write in the piece, Mark Lawn deserves credit for loaning City the money and you are right that the terms of interest are more favourable than what others would have offered. But it doesn’t change the fact that he has made a large profit on that loan, a profit out of a football club that we all know he loves.

      There has been an angry reaction – not by you – in defence of Lawn and for anyone who questions his right to make a profit. One can understand the point that we should not be all romantic and naïve to believe that an owner who is a fan should act otherwise, but the attempts to shut off any comment or debate seem a tad unwise. Again I am not singling you out as your comment is fair.

      The questions I raised in the article were more about how the football club came to be in a position to need to rely on such a loan. Which is due to the fact they embarked upon a risky strategy that Lawn was instrumental in agreeing. There has been a suggestion that Lawn saved the club but this appears to be based on an assumption rather than reality. By all means praise Lawn for making the loan but don’t invent reasons for why the loan was required.

      I admire your defence of Lawn and agree with much you say. The article was not an attack on him and I attempted to give him credit for the success achieved this season. However, the profit he has made cannot pass without comment and indeed will inevitably be used against him by others in time (wait until the next City crisis and you’ll find this brought up).

      • Jason, I have to agree with Ben that your article, not least its title, shows an underlying resentment with a suggestion that ML should perhaps have foregone what is rightfully his and because he hasn’t done, this is somehow to the detriment of his standing as a City fan. I don’t think this could be more unfair and I struggle with why you choose to say his.  He had a choice as to what to do with his own money a few years ago. He chose to put it into our club at a fair rate of return given our poor financial track record.  I presume there was not a long queue of potential investors at the start of 08/09 which coincided with the start of the current downturn.  Investment choices are about attitude to risk and reward.  You imply he would struggle to get the same reward elsewhere.  Yes but how many of us would take the risk of putting our money into a football club (if we had it)?  The words wouldn’t touch and barge pole come to mind. He took the risk.  He deserves the reward.

      • Sorry to hear you did not like the article Mike.

        It appears that this debate – replicated on Twitter – is one where a number of people are deeply unhappy the loan is even talked about.

        I am not begrudging Mark Lawn the return on his loan or suggesting he forgo it, the article goes out of its way to highlight the difficult economic climate and level of risk to his money. Nevertheless it is a handsome profit and I don’t see why this has to be ignored.

        No one would ever suggest Mark Lawn is anything but a huge City fan, and the point of the article was to highlight that he is something more than that. For a time when Mark Lawn was deeply unpopular with a section of supporters, the defence offered up was “he is a passionate Bradford City fan”. Fine he was, but surely we want more from our chairman? I think this season and the strategy employed has shown that there is more from our chairman. He has been part of devising a sound strategy to win promotion which has worked really well. And the club is in a good position, moving forwards. So it is nice to think of Mark Lawn as a successful football club owner rather than merely a passionate Bradford City fan.

        That he has made a profit on his loan shows him to be even more of a successful businessman and again that is good. And if we were to judge Mark Lawn as a football club owner here to make a profit – ie like 99% of football club owners – then he would be praised even more. Were he and Julian to sell the club tomorrow to someone not a City supporter we would expect them to act in this way also.

        Yet still it has to be noted that we have two owners where one has sunk in – and lost – a personal fortune for no obvious return and the other has loaned his money in a more measured and savvy manner. Yet for some reason the former rarely gets any praise or is talked up as being a City fan and the other is.

        I have attempted to write an article as balanced as possible on this and sorry if you disagree.

      • Has it crossed your mind that ML is a CITY FAN.A deal was struck to loan the money at albeit great risk to ML. Hypothetically, if city finished at the other end of the table…it would be conference time and ML would be SOL!

        . The deal paid off. And, I venture to say …if City ever needs a leg up again ML wILL be there for them. Thats what friends are for.

      • Thank you for your aggressive comment.

    • Mark Lawn is worth £25,000,000. Not much really in football club owner terms. Agree Lawn deserved his £1,000,000 back with interest.

      Jack Tordoff is the board member I have something against:

      City fans from the 70’s/80’s – “He saved our club twice & deserves to be honourary president”

      Me – “Yes, but he’s got over £200,000,000+ personal profit from his £300,000,000+ JCT 600 business, and NEVER invests without wanting something back.”

      Shirt sponsors = Cheap advertising = More money for Tordoff.

      Not to mention all the other times he’s invested eg. Buying the club, he has got more than his money back in return. Therefore basically investing f**k all.

      If Jack Tordoff was a city fan he would’ve bought Valley Parade back by now, and not want anything in return. It’s not like he can’t afford it.

      • Very harsh there Dan. I don’t like Tordoff either but no matter how much money he has; it’s his choice as to how he uses it.As far as I know, his sponsorship is on commercial terms, so can see no reason why it should not be welcomed.
        Len Shackleton, famous ex-Avenue player had the best view of Chairmen in his autobiography; he dedicated a chapter to what Chairmen knew about football.It was a blank , one page chapter :>)

  4. Having put his own personal capital at risk, I’m of the opinion that ML is entitled to receive some interest on his loan to the club. However, it isn’t comparable to a bank or even a supporter providing the funds. Firstly, ML is director and shareholder of the club and therefore has a position where he can directly influence the direction and actions of the club. Along with JR, he controls how well or otherwise the club functions off the pitch. That control would not be available to most other people choosing to lend money to the club.

    Secondly, this was a secured loan. So that in the event of a default by the club, Mr & Mrs Lawn (the loan was in their joint names) would be entitled to take over the assets of the club (lighting, seating, future payments on player deals etc) up to the value of the loan. The risk of default impacting adversely on the Lawns was therefore much reduced.

    Since the interest rate at 9% over base would be regarded by many as reflecting a medium to high risk, given the protection and the control of the club which ML enjoyed, any risk of default would be down to his and JR’s incompetence. The risk would therefore be in his own hands. Adding that to the debate would suggest that the interest rate was on the high side in my opinion. Interestingly some other owners who provide loans to their clubs eg Abramovich, Ashley and many othets have not historically charged any interest on their loans. The only one I could confirm who does is Milan Mandaric!

    • A good shout Dennis. Completely agree that Lawn is entitled to receive some interest, however, I disagree that 9% is too high – despite your justification.

      Abramovich and Mike Ashley are extremely wealthy men. Lawn, in comparison, has nowhere near as much and therefore putting his own personal wealth at much greater risk. Had everything gone belly up – although Lawn would be partially responsible – he had a lot to lose, it is only right therefore he should be afforded that level of protection.

  5. ML can do what he wants with his money. Up the Bantams.

  6. ML gambled (along with JR) at pushing the boat out for promotion which was unsuccessful if you look at it as he was willing to gamble then when you gamble you have the potential to lose money.

    That said ML is clearly a successful business man that is why he is in the position to loan £1m and he acted as any businessman would and tried to minimise risk to himself.

    He’s not done anything wrong but equally it was not a philanthropic decision. We’re all happy with how it’s worked out and I think they key point everyone is missing is at the end of the article –

    I prefer thinking of Lawn as a successful football club owner than I do thinking of him as unsuccessful one whose failings we overlook just because he is a passionate City supporter

    Success is better than failing with best intentions in my book

  7. I just wanted to add my two’pennth here on the rate of interest debate. I know something about this as I run a business of my own with bank loans and loans from other wealthy individuals.

    As others have stated the amount of interest charged depends almost entirely on the riskiness of the investment. A ‘safe’ investment (or one secured on real assets) generally gets charged at a bank of England (boe) rate pus around 4%. Ones which have no assets for security can be anything up to boe plus 10%.

    Actually most of these are now badged against LIBOR but that is a whole extra debate..

    My business has bank loans at 5% secured on our assets and other risk capital at 11% and 13%.

    To suggest that ML was earning a rate of interest above the norm is just wrong – I would gladly take his million at 9% and replace some of my other investors !

  8. It’s interesting that some fans feel that certain businessmen should take a philanthropic approach to investing in Bradford City. Why should Tordoff invest without a return of some form?  Because he’s one of not many locals who sit in the rich list?  He will never be forgiven by many for the 1988 failure to invest in players when a return was guaranteed (via promotion or the sale of Hendrie and McCall) but it was his money and still is. If Lawn were a real fan, he’d give a bit back. I can’t buy that argument.  My late dad thought that Ken Morrison had an obligation to invest in Bradford sport because ‘us residents and fans made him what he is and he should chuck in a few mill from time to time’. I can start to see some logic as his company grew from a time when he was wholly reliant on the good citizens of Bradford.  I don’t suppose his family or Morrisons shareholders can though?  Where is David Hockney when you need him … surely he wouldn’t miss a couple of pictures?

  9. Jason’s article seems to be that Mark Lawn gets more credit for being a “fan” than Julian Rhodes. Perhaps…. but there’s a good reason for this. Julian declines to get involved with fans forums, etc. Lawn does (remember his honest and forthright answers at the Skipton Bantams forum). Julian likes to keep his low profile; fair enough but you cannot avoid interaction with fans and expect to be at the forefront of everyone’s affections. I think all fans appreciate Julian’s love of the club, it’s just that Mark’s love is so much more obvious and in the public eye.
    Finally there appears to be a consensus that Mark Lawn’s loan was risky, at comparatively good rates for the club and, with hindsight, a good deal for all concerned.

  10. While balanced, the thrust of this article is the fact that Mark Lawn has profited from his investment; the suggestion of this article is that he was perhaps wrong, maybe selfish, maybe greedy to do so, putting himself ahead of the club. I think his claret and amber priorities are clearly illustrated in the risk he took with his investment in the first place. He put his money where his heart is…when the prospect of a £1.5m club profit was as far-fetched as two Wembley finals.The fact that he had earned a substantial return on his investment — “earned” being the operative word — is hardly a cause for raising an eyebrow, as if he is some kind of corporate fat cat.
    He’s a fan and he’s proved it by going out on a financial limb. But he’s not only a fan, he’s a businessman and football is a business — a ruthless one at that. His interest is his deserved bonus for turning the company around and putting us in the black. There is a value to that for club and fans alike and I’m glad that Mark Lawn has financially benefitted. We shouldn’t begrudge him it. We should be applauding what he deserves. He’s not Santa Claus and the idea that he shld just give, give, give and then give again from his accrued interest is a rosy notion that has its place in a Roy of the Rovers story but not real life in the lower tiers.
    Steve Dennis, Los Angeles

    • There seems to be a common thread in the “he deserves it” argument pointing out that he is a Bradford City supporter, but no one is suggesting he is anything but. Perhaps you are right to say that we should be “applauding what he deserves” and be glad he has financially benefited, but what about Julian Rhodes?

      Anyway, thank you for your comment which is much appreciated.

  11. Julian Rhodes deserves equal praise and gratitude for all that he has done. His sacrifices and risks are relatively equal but I was responding to the issue of ML’s return on his investment. It’s all relative and we are where we are because of Lawn, Rhodes, Baldwin and Parky. Here’s to continued progress and profits…

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