DR. JOHN Beech believes that too many football clubs of this era have become too dependent on a “benefactor” to bankroll their funds and feels many have become too reliant on their owner’s finances, writes Steven Carpenter.
The Coventry University lecturer, who is Head of Sport & Tourism Applied Research, said that despite Ray Ranson being hailed as a “saviour” by Coventry City FC fans, Beech believes there are question marks surrounding his commitment and long term future at the club.
He said: “I think some benefactors take over clubs for less ultra-listic reasons, so you go through the kind of quick celebrity status that goes with it, the lifestyle that goes with it. Obviously the fact that they are benefactors means they have got lots of money so they are looking for something different from their mainstream business.
The key word is saviour. In most cases they come into situations where the club is in desperate straits and somebody coming in, who is prepared to put some money in which will mean survival, is often as crucial as survival.”
He added, “I think there are benefactors with good intentions, but those who can ultimately still be seen as a 100% benefactor in the long run are very, very few.
If you were to look at the statistics regarding clubs that have been relegated from the top tier of English football and have then gone into administration, you will find a frightening figure; within four years and in most cases only two, the club will have become insolvent.
Typical debts of clubs going into insolvency is £10m for teams in the second tier of English football, but clubs like Coventry City have “inappropriate debts” which go beyond the £30m mark and the club were very close to going into administration before their so called ‘savour’ came in.
The Midlands side were taken over by Ray Ranson and his company – the CISU group – in 2007, and hope to take the Championship team back into the Premiership after a nine year stint outside the top flight, and Dr. Beech feels that CISU are in it for the long run.
“CISU have got a very different business model, but it does focus on finding clubs that are not venerable, but clubs that are in financial difficulty and of course Coventry were. They were within 25 minutes of going into administration before they were finally rescued.
Some of the other clubs that CISU looked at over the years were all clubs that had been through financial difficulty. They have a very particular business model, for very particular circumstances and it seems to be working so far for Coventry,” Beech added.
“It is a company being run as a business, because in a business, the profit motivation has to be the highest motivation. All the indications are positive, but we shall have to see in time.”