By John Dewhirst
Football has probably done more than the business press to make people familiar with insolvency processes and the circumstances of financial crises. The manner in which they are reported is also radically different from previous times, reflecting the extent to which these are now commonplace episodes and a source of drama.
The coverage of Sky TV in the countdown to EFL deadlines for Bury and Bolton Wanderers was tasteless to say the least and reveals an alarming disconnect between the tragedy of failure and the somewhat blasé attitude towards such crises. It’s become the satellite TV equivalent of Houdini entertainment.
Sadly Bury FC is no more, but true to the regular script Bolton were rescued in a last minute deal. Even then it was reported that a buyer was ready to invest in Bury, the obstacle being the deadline and not the intent.
What then is the Houdini magic of football rescue? The answer quite simply is that there is seemingly no shortage of people wanting to ‘invest’ their money. The football industry continues to attract more money despite every indicator cautioning otherwise. It remains an ever inflating bubble that looks like it will never burst and not surprisingly it gives football clubs an air of invincibility; whilst financial failure is common, rarely does it become a terminal event and Bury FC was the first club since 1992 to drop out of the Football League mid-season.
Supporters could be forgiven the thought that the terminal implications of insolvency are oft mentioned but rarely happen and miraculously, yesterday’s problems can be made to vanish. In which case what’s the problem with failure and getting caught short?
During the last twenty five years or so there has been a change in attitude and response towards business failure on the part of lenders, investors and company managers. Driven by change in insolvency legislation, it has been described as a rescue culture.
Whereas previously business failure was more than likely to be a terminal event, there has become an increasing number of options to rescue a business through processes such as administration, the emergence of specialist funding as well as specialist advisers. Typically, this has involved responding to a situation of crisis through the restructuring of operations, balance sheets and management teams that has allowed a business to effect a turnaround.
Soccer has benefited from this culture which coincidentally emerged roughly at the same time that the current football industry bubble started to inflate exponentially. In turn, football and its bubble economics has been a beneficiary of the rescue culture.
Whereas in the 1970s and prior, directors at Bradford City and Bradford Park Avenue wrestled with the moral implications of insolvency, nowadays it is more the case that today’s bad news becomes tomorrow’s fish and chip wrapper. (Not strictly so because newsprint is no longer used for takeaway food wraps but hopefully the point is made.) There has also been a change in attitude towards personal debt and insolvency – neither does individual bankruptcy bring with it the shame and opprobrium that used to be associated with it.
The rescue culture has played its part in reducing the incidence of company liquidations and preventing the loss of jobs. (NB It’s probably also been one of the causes of lower productivity in the UK, but that is another debate.) Yet whilst businesses have been rescued, not all have necessarily been transformed. A failing business can be rescued from impending insolvency by the injection of new money or reduction in liabilities but that does not always solve the reasons why that business got into trouble in the first place.
In other words, Bolton Wanderers might well have been rescued but that doesn’t mean it will be transformed and become profitable. What has happened at Bolton is that immediate insolvency has been averted but the club’s problems will not necessarily have gone away. Company rescues are not about throwing fairy dust at a situation but are essentially about buying time for a business to sort itself out, if not to kick the can down the road.
In the aftermath of the last recession there were numerous companies that were rescued but which subsequently became to all intents and purposes, zombies. They were burdened by new debt and historic liabilities not all of which disappeared and these then dominated their affairs.
If you want an example of a zombie business, look no further than Bradford Bulls. The club has another Grand Slam reputation: administration in 2012, 2014 and 2016 followed by liquidation in 2017. Taking into account the liquidation of the original Bradford Northern RLFC in 1964, it represents quite a record for professional rugby in Bradford. I went to Odsal to witness the last game and it was patently obvious that the club has not had two sticks to rub together for a long time and the aftermath of serial financial crises is there for all to see.
Little wonder that the club cannot afford to stay at Odsal. What it can afford to do is a different matter entirely but it is fanciful to believe that it can fund a new stadium. Nor could it present itself as an attractive tenant at Valley Parade.
Wandering around Odsal I was reminded of Bradford football in the 1970s when City, Avenue and Northern were all on their knees. The big difference between Bradford Bulls and the likes of Bury or Bolton Wanderers is that Rugby League has been bypassed by football capitalists and no bubble conditions exist, as was the case in the 1970s and 1980s. The sport has been on a downward trajectory for the past decade and so when a club like the Bulls goes bust, few people are likely to rush to its rescue.
Attendances at Odsal have been less than half those at Valley Parade although interestingly, the crowd against Sheffield was still in excess of those at other games in Huddersfield and Salford the same day. Nevertheless, with no assets, a tarnished brand and the declining popularity of RL, the Bulls will likely remain a zombie operation until and unless a benefactor with more money than sense can be found.
Bradford City has not been unaffected by the financial crises of the previous decade which remained a big distraction long after rescues were concluded. The lease liabilities at Valley Parade are testament to this and they have dominated the club’s budgeting since 2003. This commitment alone has been an obstacle and a constraint.
It therefore becomes somewhat fatuous for some individuals to complain that the club has no ambition because it is akin to blaming a man with a broken leg that he’s not running fast enough. To make matters worse, in the current circumstances the club is not profitable and trading losses are another factor in the budgeting – in other words, the man with the broken leg has got other ailments.
There is a whole host of gripes about the way that Bradford City is being run and I am sure that we could all contribute to the list. However to suggest that collectively they amount to a ‘lack of ambition’ or to imply that they could be fixed overnight is nonsense. Besides, if you list them all you get into the real world challenge of prioritising.
Neither does it make sense to put them into the same category as frustration with the manager’s tactics. And with regards to Gary Bowyer, let’s not lose sight of the fact that our manager was a popular appointment, generally considered capable of a rebuilding programme to provide exactly the kind of longer-term development and ambition that we all crave.
‘Lack of ambition’ has become the ultimate indictment about the way the club is run but we have yet to see the practical suggestions for how all the nefarious issues can be remedied, by when, at what cost or by whom. It feels like a marital breakdown, an outpouring of all the frustrations and grudges of the past but the criticisms would be far healthier if the complaints could be put into some sort of context and solutions offered to those in charge at Valley Parade.
Maybe the club should actively encourage such feedback. Whether there would be a consensus on how to go about mending Bradford City AFC is anyone’s guess. In the cold light of day it comes down to League position.
Bury was ‘an ambitious club’ that overreached itself, falling spectacularly to earth and I doubt very much that anyone anticipated the consequences and the possibility of a terminal outcome. That sort of ‘ambition’ without evaluation of risk is irresponsible and to assume that there are no consequences of failure is plain stupid.
Is a gambler an ambitious man or just a plain gambler? And is it a coincidence that gambling in the boardroom is mirrored by the gambling virus in football generally? I know that it’s become the latest form of virtue signalling to declare one’s ambition for the club but I think we need to get real and recognise that our man in the race needs a health check before we expect him to sprint to become a gold medal champion.
In my opinion it’s not ambition that is lacking at Valley Parade, it is vision. Everyone at the club wants promotion and Bradford City AFC needs it. Do Julian Rhodes or other board members really think otherwise? On his part, Stefan Rupp knows that promotion is vital for him to realise value from his investment. The short-term ambition or rather, target is unambiguous.
The frustration at this stage is more to do with how and when that target can be achieved, an issue that has more to do with tactics (literally) than strategy. Neither would anyone at Valley Parade be averse to getting promoted to the Championship. Hence when I hear people say that there is an ambition gap at Bradford City, I interpret it as the age old gripe that the directors are not digging deep enough into their pockets in addition to funding the losses. (Ironically when directors at Valley Parade have previously splashed the cash it has not always been successful and there has been a track record of ineffective signings.)
The siren call for new players, a new manager and new facilities on social media is like the wailing of a toddler at a supermarket checkout wanting everything and wanting it now. Social media has become part of the problem with attention seeking experts creating noise and encouraging the detachment from reality with simplistic and emotive tweets.
The apparent resentment expressed online about old people, young people, the bantams family and others who have followed the club through lean years has become like a witch hunt. Certain people are blaming ‘lack of ambition’ on those who sit alongside them in the stands instead of recognising the inheritance at Valley Parade, the legacy of all yesterday’s failings and existing financial commitments as well as the whole Bradford factor.
However I don’t think that the club has helped itself and whilst there have been massive, constructive changes behind the scenes at Valley Parade it needs visible leadership to communicate not only the reality of the situation but the vision for the future, crucially to manage expectations and get everyone behind the club instead of focusing on faults.
As regards the manager’s tactics, yes that is a pressing concern but it’s not to be confused with the vision or strategic direction of BCAFC which is a distinct discussion. The ‘ambition’ debate gets louder when the team loses but strategy is about the bigger picture and doesn’t get reset after every defeat.
Bury FC is a warning to English football that clubs are not immortal and do not have a divine right to existence. One day the bubble will burst and when the tide goes out we will see who is wearing shorts.
To see the pitiful state of Bradford Bulls was depressing and a salutary reminder of what things used to be like before football finances were overtaken by insanity. You cannot defy financial gravity indefinitely and nor can you take it for granted that a benefactor will come to the rescue. We need to be careful about what we wish for.
John Dewhirst is author of ROOM AT THE TOP and LIFE AT THE TOP (pub BANTAMSPAST, 2016) which tell the story of the origins and early history of professional football in Bradford. [Tweets: @jpdewhirst]