Turmoil Week: Plymouth Argyle (Part One)

Posted by on Jan 28, 2012 in Uncategorized | 7 Comments
Turmoil Week: Plymouth Argyle (Part One)

As our ‘Turmoil Week’ draws to a close, we turn the spotlight westwards to Plymouth, arguably the most well-documented club in crisis over the past 18 months or so. Thankfully, the situation at Home Park now appears to be settling down but here season ticket holder Roger Willis takes a look back over an incredible few years, describing in detail the events that very nearly led to the Pilgrims’ demise. Spread over two parts, this first article considers the circumstances that led to Argyle’s financial meltdown before a second, due for publication tomorrow morning, documents the headache-inducing administration process.

“Can you write a piece about Argyle to fit into the general theme of ‘Clubs In Turmoil’ for a series of related articles that we’re running?”, I was asked.

“Yes, I’d be delighted to”, I replied.

I have had a good, long think about it and now need to begin but where? So much has happened recently and the roots of the causes are so deep that it defies a brief answer. So I decided to step outside the Argyle bubble and ask “what would other people most associate with Argyle?” and start there.

“It’s in Cornwall.” (No it isn’t.)

“Just along a bit from Southampton.” (No it isn’t.)

“They play in green.” (Yes we do.)

“Used to be in the CCC.” (Yes we were.)

“Paul Sturrock won two titles.” (No he didn’t. Not quite.)

The Only Way is Up

Paul Sturrock is where I have to start. He was appointed as Argyle manager by the self-made multimillionaire Dan McCauley who was by far the most controversial chairman the club had ever had, up to that date, when it was at the lowest point, up to that date, in its entire history.

Languishing in 91st position in the Football League, Argyle were on the brink of being knocked out of the 2000-01 FA Cup in a home replay by non-league Chester City. Sturrock subsequently began a quiet revolution down in our Sleepy Hollow and by the season’s end we even had a distant shot at a play-off spot before eventually ending the season in mid-table.

Sturrock’s first pre-season saw the club embark on a mini-tour of his native Scotland. This was a modern era first for us; a pre-season tour was something of a novelty at the time, apart from a 1997 one-off game in Banjul against the Gambian national side, because up to that point our ‘tours’ rarely reached further than the outer reaches of the Westcountry.

The prospect of following the team around foreign parts for a week appealed to some Argyle fans and, as legend has it, a late night beer-fuelled discussion in a hotel bar saw the plot hatched, between a handful of randomly thrown together guys, to form a consortium with the aim of buying out the, by now, hugely unpopular and increasingly erratic McCauley. In February 2001 it all came together for them and out of the blue McCauley and existing director Paul Stapleton were joined on the board by Michael Foot, Peter Jones, Nic Warren and Phill Gill. Argyle, after a sticky start, didn’t look back.

The finishing touches to the new board as McCauley was replaced by Robert Dennerley. Within three years Argyle had set all sorts of club records, won two titles and Paul Sturrock could lay fair claim to being the most successful manager that Argyle ever had.

Such unprecedented success had been noticed and in March 2004 Sturrock was enticed away to manage Rupert Lowe’s Southampton. Replaced by Bobby Williamson, another Scot, Argyle went on to achieve their second promotion as champions in three years during his first game in charge.

2004-05, Argyle’s first back in the second tier for over a decade, was a season of struggle but Williamson’s Argyle ended up in a creditable 17th position. A period of unspectacular on-pitch progress for a more-or-less resurgent Argyle was under way.

A bad start to the next season saw to Williamson’s replacement by Tony Pulis. The Welshman steadied the ship and a season of dull, pragmatic and effective football saw us finish 2005-06 safely in 14th. In turn Pulis was enticed to rejoin Stoke City and was succeeded by Ian Holloway. Seven seasons of year-on-year on-pitch progress under these managers saw Argyle finish the 2006-07 season in 11th position in the CCC.

The Grandstand

Sadly there had not been equivalent progress off the field. During this period a boardroom dispute about how best to take the club forward had led to stasis. The oft-maligned McCauley had bequeathed Argyle two huge advantages: one of them was Paul Sturrock as manager and the other the redevelopment of three sides of the old ground. It was the, to this day still unstarted, redevelopment of the fourth side of the ground, the old grandstand and Mayflower Terrace in front of it, that lay at the heart of much acrimony and led, via a circuitous route, to our eventual calamitous catastrophic decline.

Prior to the redevelopment of the ground Argyle’s council-owned Home Park had become a crumbling and decrepit, if much loved, old-school wreck. After the redevelopment the grandstand still was; it needed to be replaced for a host of commercial and practical reasons.

Following the obligatory open-topped bus parade champions are obliged to make, the exultant, green-clad masses witnessed Plymouth City Council leader Tudor Evans promise that he would “complete the redevelopment and create a ground fit for champions”. Except he couldn’t and didn’t. Evans did not ever have a stable enough powerbase (Plymouth’s has been a marginal council in recent years) or the spare cash to deliver on his impetuous but crowd-pleasing promise. His words became an embarrassment both to him, Argyle and the city.

During the Glory Years a rift developed in the boardroom. It boiled down to spending priorities: should the club invest in infra-structure or in the playing staff? A 3v3 boardroom stalemate ensued and the spending didn’t happen at all. 2005 saw Foot and Jones leave the boardroom to be replaced by Damon Lenszner and Tony Wrathall and the club decided to live according to its means and adopt a policy of ‘organic growth’.

Improvement of the club’s infra-structure was nonetheless set as a priority to be achieved “imminently”. The word “imminent” became a standing joke. Plymouth City Council could not meet Evans’s rash promise either financially or politically and Argyle, as tenants in a council-owned stadium, could hardly be expected to foot a bill estimated at around £10m for a new grandstand.

Something had to give and it did: the council sold the ground’s freehold to the club for £2.7m in January 2007. A deal the club claimed would enable the required finance to be generated privately, which would in turn see a new grandstand built and with it new corporate facilities, a modern media room, bars and restaurants. These were to provide the match day income needed to support greater expenditure on the team.

Various schemes to replace the grandstand came and went but nothing actually ever happened; no finance was ever arranged; no planning permission sought; not a single brick was ever laid. Directors continued to come and go and Lenszner and Warren left.

Icarus Flew Too Close To the Sun, Too

Argyle were applauded by accountants Deloitte and Touche in 2008 as one of the best-run clubs in the country as it had traded profitably, crucially keeping the wages/turnover ratio at a sustainable level of around 65%.

However, the steady on-pitch progress was not enough for many of the club’s fans. A debate had long raged about the lack of financial clout amongst the directors. The club’s organic growth model was hugely criticised. “Why don’t we just go for it?” was a question often raised. There was a prolonged clamour for the board to find a stream of new investment and to make that investment in the team rather than in the infra-structure.

Most supporters, being supporters, didn’t really mind too much about the off-pitch policies as Holloway’s team thrived. Late 2007 saw Argyle become very serious CCC play-off contenders following a string of good results and impressive performances, particularly away from home.

At which point the first wheel-nut came off. That wheel-nut was the renewal, or more accurately the failure to negotiate a renewal, of the popular Hungarian playmaker Ákos Buzsáky’s contract. A deal that had seemed to be done suddenly, mysteriously wasn’t. Argyle travelled to an away game at Preston with Buzsáky being left behind at the last minute with the instruction “find yourself a new club”. He did. Before the weekend was over he was snapped up by QPR for a fee believed to be £500k.

The rest of the nuts similarly disengaged in double-quick time: Holloway walked out and went to manage Leicester; Sylvan Ebanks-Blank activated a release clause in his contract and joined Wolves for £1.5m; Barry Hayles followed Holloway to Leicester (£150k); David Norris went to Ipswich (£2m); Dan Gosling left for Everton (£1.25m); at the end of the season Peter Halmosi went to Hull (£3m) and Argyle legend Paul Wotton and the popular Lillian Nalis were released. The best team that Argyle had had in decades lay in ruins. If any side loses the manager, most skilful player, hardest working player, penalty taker, club captain, most experienced player and best young player it is going to struggle. Argyle’s progress petered out and it ended the 2007-08 season 10th in the CCC.

It was with some relief, to me at least, that chairman Paul Stapleton was able to announce that Holloway’s replacement would be Paul Sturrock. “Phew!” I thought. “Everything will be OK.” Except it wasn’t and it might not ever be “OK” as we once understood it again. All of a sudden Argyle was as rich, in fact far, far richer in cash terms, than it had ever been before. There was barely a team but there was plenty of cash in the bank. The club’s balance sheet had never been stronger.

More changes happened in the boardroom and April 2008 saw a seemingly rich overseas investor, Japanese businessman Yasuaki Kagami, join the board along with his American associate George Synan. Kagami was a property man and he was to be an integral part of the plan to replace the grandstand (so we were told). He didn’t ever pretend that he was interested in the football and eventually left the club having never actually seen the team play. Kagami bought out Gill in a deal that was only fully resolved after Gill had taken Kagami to court following a bitter financial wrangle.

Cash in hand, Sturrock rapidly recruited a host of players to replace the departed on, by Argyle’s standards, high wages and long-term contracts as the riches of the Premier League beckoned enticingly. Steve MacLean’s 4 year deal from Cardiff being the most expensive with a transfer fee of £500k and a guaranteed wage to match. None of the new signings ever really impressed and the ones who did impress seemed to suffer long-term injuries one after the other. The team never recovered and the club’s decline began.

The destructive seed planted by Tudor Evans’ extravagant promise in 2002 had taken root and was well on the way to blooming. The elements were nearly all in place for the bubble to burst as the team limped on. The years of steady progress and optimism were replaced by grinding struggle and attritional football played on an increasingly awful playing surface in front of ever-dwindling crowds. As always seems to happen to a struggling team if it hadn’t been for bad luck Argyle would have had no luck at all. The quest to replace the grandstand continued and to that end the ever-elusive “investment” was sought but never realised.

The New World

July 2009 saw the replacement of Stapleton as chairman by former Manchester United chairman Sir Roy Gardner; local boy made-good Keith Todd came with him as executive director. Collectively Kagami, Todd and Gardner promised Argyle fans a New World and it was Gardner and Todd who, to widespread astonishment both locally and nationally, proposed that Plymouth become part of England’s 2018 World Cup bid to be a host city. Home Park would be converted to a 46,000 capacity stadium to meet the competition’s requirements. Subsequently, it has emerged that the bid had cost the club more than £1m.

A toxic cocktail had been created. The longer-term plans to develop off the pitch had all hinged on the failed bid. On the pitch dour football played by expensively paid players on long contracts saw attendances dwindle further. It was all obviously unsustainable. The transfer cash surplus was long gone, even though it was never adequately explained how it had all been spent with a highly paid and bloated playing squad apparently to blame. The club accounts in published in March 2010 showed “other operating costs” of nearly £5m, making a grand total of £12m over the three years up to that point, and a wage bill of £7.5m. To put those figures into context the club’s annual turnover was about £9m.

The Beginning of the Nightmare

Amidst a background of rumour, half-truth denial and innuendo a desperate situation began to reveal itself. Initially it was the ever-loudening of “taxi driver” stories: “they haven’t paid such-and-such a bill to my mate’s brother” or “my mate’s niece who works in the offices hasn’t been paid this month” and then “they haven’t paid the staff again this month”. All of the stories were rubbished by the club until grudging acknowledgement came that a “water leak had affected the IT network” and so the payments “hadn’t gone through on time but it was all in hand and not a serious problem.” Except it was.

The curtains of deceit started to fall away in December 2009 when the Football League placed us under a transfer embargo for what Keith Todd claimed was a “technicality due to an historical issue”. This was soon followed by a promise of a £1.5m cash injection from the mysterious Japanese director Kagami. Plans to “stabilise” and to “generate the cash flow the club needs” were announced by his representative George Synan without actually detailing what those plans may have been. Cash flow presumably required to pay, amongst other things, yet another manager as Paul Mariner, who was brought to the club initially as an ambassador for the World Cup bid, began to assist Paul Sturrock and then took charge of the team as Head Coach whilst Sturrock was kicked upstairs to do… Well nobody really knew what he was to do. The rumour persisted that Sturrock was in effect sacked but that it couldn’t afford to pay off his contract and so he stayed and did, er, something to avoid the club having to pay him off.

December 2009 saw a glimmer of hope arrive in the form of Plymouth’s choice as one of the preferred cities in the FA’s doomed World Cup bid. “If England does not get the World Cup it makes no difference to our plans to develop the stadium” was the mantra from within the club. It was to prove to be a false glimmer. There was a new five year plan issued too: “we aim to be a Premiership club within five years” said Gardner. Five year plans always say that, don’t they?

The transfer embargo remained in place until January 2010 but settling the “historical debts” that had troubled the Football League meant that “historical taxes” had to be paid to HMRC and had not been. The first of several winding-up orders had been issued “in the previous month” by HMRC and it was reported that the club was incurring monthly losses believed to be in the order of £250k each month. The club quickly settled and the winding-up order was dropped before the case was heard in February.

A club that is losing money hand over fist and which is being hounded both by the Football League and HMRC has to cut costs and raise revenue. Rumours began to circulate that the sale of striker Jamie Mackie was being touted to other clubs. The rumours were strongly denied by Argyle director Keith Todd.

As January 2010 came to an end club spokesman Tony Campbell, the man who had introduced Kagami to the club and Kagami’s Johnny-on-the-spot, announced that Argyle intended to completely replace the rapidly deteriorating pitch. On the face of it this was a much-needed welcome announcement. The playing surface at Home Park had become progressively worse and was reaching the point where it was becoming positively dangerous to play on. It was bumpy and uneven when dry and hideously boggy when wet. The cost? Campbell refused to be specific but mentioned “several hundred thousand pounds” as a likely estimate for the hi-tech Fibrelastic pitch that was being considered.

It was against this background (falling crowds, rising wages, an expensive World Cup bid, ambitious future spending plans, an almost unplayable pitch, rumours of unpaid debt, a transfer embargo and winding-up orders being issued by HMRC) that Argyle continued to struggle on the pitch and continued to play before disappointing (and usually soon disappointed) numbers of paying spectators.

How could they turn this around? By signing the American international Kenny Cooper from Munich 1860 on-loan until the end of the season to score the much-needed goals. Cooper’s deal allegedly incurred a £500k “loan fee” and wages to match. Cooper was recuperating from serious injury and the dreadful pitch didn’t help that return. Cooper barely played and when he did he failed to impress.

February 2010 began with Argyle signing Damien Johnson from Birmingham City and the out-of-court settlement of HMRC’s winding-up order. Another high earner on a long contract was added to the wage bill as the last card was played and the desperate, doomed battle to avoid relegation continued.

As the club’s on-pitch woes continued off-pitch a series of convoluted plans were being hatched. The football club and the freehold were to be separated. A company called PAFC Holdings was established by the directors which intended to buy the freehold from the club and then lease the ground back thus settling the debt problem. This plan, nor subsequent variants of it, ever came to fruition. At the same time accounts for the previous season were released that showed a running loss of £2.8m.

Long-standing plans to see share options activated that would have seen Stapleton, Wrathall and Dennerley sell their stakes in the club to Todd, Gardner and Kagami remained unfulfilled in unexplained circumstances. Later Stapleton, a chartered accountant by profession, claimed that he had “taken his eye off the ball” and “didn’t realise how bad things really were” which is remarkable given that the average attendance had just fallen for the sixth consecutive season: where once the club averaged around 16,000 paying customers they now numbered only around 10,000.

Relegation #1

A shambolic and gutless defeat away at Watford in a must-win game made the prospect of relegation in 2010 a near inevitability. The impact of the cut in TV revenue did not deter the plan to spend £500k on a replacement pitch. That relegation was duly confirmed on a Monday night at Home Park by defeat to Newcastle United in a match that saw them promoted as champions. Argyle as a club made many friends in the north east that night by playing “We Are the Champions”, “Blaydon Races” and “Local Hero” as the Toon Army celebrated their triumph. You can imagine how this was received by the home supporters. To be relegated at any time is a kick in the teeth but to see the away fans encouraged to celebrate long and hard as it happens was horribly painful.

Off the pitch the chaos continued: the club pressed on with the pitch replacement; the grandstand was still set to be replaced in 12 months time; Sturrock eventually left; Peter Reid became the next new manager in June 2010 with Mariner now his assistant; Jamie Mackie was sold to QPR for £500k; a link, in the form of a seemingly insignificant pre-season friendly, with Truro City was formed; Ashley Barnes went to Brighton for a fee believed to be £100k.

Blackburn loanee Alan Judge also left and opined that Argyle needed to be “more professional on and off the pitch” (oh how we laughed) and it was disclosed that the club had raised money against the equity of the freehold via a mortgage with a company called Mastpoint. Mastpoint was/is an investment vehicle partly owned by directors Todd and Gardner.

Todd spoke candidly to the Plymouth Vital website of the financial problems that the club faced: “there is no question we have to provide the best opportunity to bounce straight back to the Championship whilst trying to ensure that the club is financially stabilised. I totally under-estimated how difficult it is to get the finances sorted. Cost-cutting is not straightforward because of the nature of players’ fixed-term contracts, and revenue generation is directly tied to performance. So with poor results, income goes down but costs don’t very easily.” Which are probably the truest words he ever uttered.

In October 2010 the club’s second winding-up order was issued by HMRC. Again the club promptly paid up and the case was dismissed. However, signs of further tension in the boardroom emerged with Keith Todd admitting that not all, or even very much, of the £1.5m allegedly committed by Kagami when the last winding-up order was dismissed had ever arrived. It appeared that the board was now split three ways with none of Todd and Gardner or Stapleton, Wrathall and Dennerley or Kagami being both able and willing to provide further direct funding to support the club as it continued to haemorrhage money.

Peter Ridsdale

And such was the background when Peter Ridsdale first arrived on the scene. Ridsdale arrived for a home game against Huddersfield Town in October 2010 as an “guest of the club”, whilst he “enjoyed a break in the south west on a walking holiday” (Keith Todd). There was no chance at all that he would have any further involvement beyond that. A theory that was not supported by Ridsdale’s presence in the directors’ box in an away game at Oldham “as a guest of their chairman” (Keith Todd) a week later.

The signs of a club under ever-increasing pressure were everywhere that you looked. The money worries and boardroom disharmony jostled with poor results for top-billing in the local media and on the pitch Argyle had started what turned out to be an enduring run of disciplinary issues with 6 red cards in 14 games culminating in a humiliating 4-0 home defeat to Swindon Town in the FA Cup. It wasn’t long before the discontent spread to the terraces and over 9,000 fans witnessed a night of mayhem in and around the ground as Argyle were dumped out of the Paint Trophy by local rivals Exeter City. Surely it couldn’t get any worse? Little did we know. The end wasn’t even yet beginning and the “worst” wasn’t even in sight.

At the end of November 2010 another, the third so far, winding-up order was issued by HMRC; both staff and players went unpaid at the month’s end; Barclays Bank froze the club’s empty bank account.

In December 2010 it all started going really nuclear: the payments to Inscapes, the company that had laid the new hi-tech Fibrelastic pitch, were not met; HMRC was demanding £700k within a week; club debts were revealed to total a staggering £17m; the sale of the freehold for £7.5m to yet another corporate vehicle (Home Park Properties Limited this time) had not been completed as planned.

The club staff agreed to work without pay, not that they had any chance of being paid, hoping to pave the way for a speedy and appropriate solution to the financial problems and then the 2018 World Cup was controversially awarded to Russia. Argyle’s increasingly shaky financial model, such as it was, stood no chance at all and completely imploded. Argyle’s response? “We will scale back the proposed 46k seat stadium to 25k” (Paul Stapleton).

Somehow the court allowed Argyle a 63 day stay of execution (until February 9th 2011) to raise the required money. Largely that decision was based on a looming transfer window and a letter supplied to the court by Kagami that seemed to promise imminent investment of around £2m. The possible sale of the freehold, which had recently been valued at £7.5m, was again proposed. Things were so desperate that even Peter Ridsdale, who had been acting as an unofficial advisor, decided to leave the club after refusing the role of Chief Executive Officer because “terms and conditions could not be agreed”. He didn’t stay away long…

Part Two, which covers the steps taken by the supporters to safeguard the club, the ensuing administration process, an amazing coincidence at breakfast, a candle-lit vigil, Fans Reunited and James Brent’s takeover, can be viewed here.

The Two Unfortunates
The non-partisan website with an eye on the Football League

7 Comments

  1. STEVE
    January 28, 2012

    How well did the author research his statement that Dan McCauley was BY FAR the most controversial Chairman PAFC has ever had. It simply isn’t true.
    Yes he was controversial but certainly no more so than Ron Blindell, Chairman in the late 50s and early to mid 60s.
    How many times was McCauley overthrown and sacked by his own Board? I haven’t checked but I suggest never. It happened to Blindell. How many times was McCauley the cause of a visit by the FA Secretary, called in to sort the Board wrangling? I haven’t checked but I suggest never. It happened with Blindell. How many times did McCauley change the team at half-time? I suggest never. Blindell did it during a home game against Leeds in season 1960-61d.
    McCauley simply wasn’t BY FAR the most controversial Chairman of all time.

    Reply
  2. Tk
    January 29, 2012

    This is authored by the same Roger Willis who, as ‘Babararacuda’, spent a great deal of time on Pasoti condemning as ‘brown tints’ anyone who dared to criticise Paul Stapleton. Baba was one of the bitter-enders, although even he finally admitted that he’d been wrong about (for example) the sale of the ground. Still, this article is far gentler on Paul Stapleton and his friends on the board than it shoudl be.

    Reply
  3. Phil
    January 29, 2012

    Steve you have completely lost the plot! This is a fantastic article (as is part 2) and you want to have a rant about which chairman was the biggest nutter. Why not congratulate the author of laying out in great detail, for the 1st time for most supporters, what has gone on at Argyle for the last few years.
    To Lloyd I say you’ve done a great job and I look forward to the book which you surely must write.

    Reply
    • STEVE
      January 31, 2012

      Yes, spot on Phil. I stand corrected. I should have done that. Both articles were really well written and full of detail. Unfortunately, I just have a real ‘thing’ about people thinking that football and in particular Argyle did not start until 1970.

      Reply
  4. Wimb
    January 30, 2012

    A Brilliant… if not scary account of what can happen to any club that lets it’s guard down financially.

    Great piece of writing.

    Reply
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