There were confident forecasts in the summer of 2009 that promotion to the elite league, even if turned out (as it did) to be for only a single season, would usher in a decade of financial wellbeing. Now we know that optimism has been refuted by a combination of high wage bills, poorly-invested player acquisitions, the expensive servicing and repayment of internal and external loans, and the continuing substantial cost of leasing back Turf Moor and Gawthorpe.
The welcome upsurge in form by Eddie Howe’s young side has relieved the gloom, but the imminent annual meeting should still provide an opportunity for a livelier debate than seems to have been the case over the past few years.
Perhaps I could mention just a couple of matters on which shareholders might reasonably expect a degree of clarification.
The first concerns ownership of the ground and training ground which passed to Longside Properties, a company set up by the chairman and another director seven years ago and which provides an annual rental paid by the club currently standing at £372,000.
The deal evidently made Longside Properties a desirable asset and it was duly sold by the two directors in 2009. I understand the purchaser was Lionbridge, a property company registered in the British Virgin Islands, but the interesting question is who owns Lionbridge and what was the rationale behind the decision of the club not to exercise its right to buy back the stadium and the training ground when the first tranche of Premiership money came in?
The second matter concerns the University College of Football Business operated from Turf Moor, a company quite separate from Burnley Football and Athletic Company but often described as the brainchild of the club’s operations director Brendan Flood and the outgoing chief executive Paul Fletcher, who are both directors of UCFB.
Since the club is effectively UCFB’s landlord a legitimate question for shareholders is what procedures are in place to ensure that the overlapping in control of the two organisations does not result in unacceptable conflicts of interest?
Now that changes in company legislation have removed the obligation to give details of directors’ shareholdings in the annual report it may be useful if I summarise the results of my exercising a shareholder’s right to scrutinise the share register.
The five directors, or companies or trusts controlled by them individually, own 93% of the company’s issued shares and the approximate breakdown is Brendan Flood (28%), Barry Kilby (26%), Michael Garlick (23%), John Banaszkiewicz (10%) and Clive Holt (6%). The four directors who left the board last November transferred their holdings to those remaining.
Finally. can I wish the board luck in recruiting additional associate directors, assuming that the changes in the articles to permit this are approved at the AGM. Up to 50 are to be recruited on payment of a minimum of £100,000 for a period of five years in office.
That must rank as one of the most expensive season tickets in the history of the game, though no doubt there may be beneficial terms and conditions not mentioned in the papers for the meeting.
LOWER LANGTREE FARM STANDISH