SO WHAT’S NEXT?
AL: The target is to get it over the line by the end of June. To do that we need to go through some legal and financial diligence and get some paperwork drafted. The groundwork’s been done; the Trust vote was very helpful and we’re trying to hit the ground running by starting the recruitment process. So far we’re on track.
ARE THERE ANY POTENTIAL BUMPS IN THE ROAD?
AL: A big stumbling block is relegation, because that would mean we’d be looking at the financials in a different way. But we’re working on the assumption we’re staying up.
IS ANY PART OF THE RESTRUCTURE DEPENDENT ON STAYING UP?
AL: No. But for me it’s all positive thoughts – staying up, pressing on, being in a good position.
HOW LONG DOES THE LEGAL PROCESS TAKE?
AL: I’ve done this 100 times before and lawyers like to take their time on these things. I see this being a six to eight week process.
THEN WHAT?
AL: Signing the documentation, and implementation.
WHEN WILL THE SALES AND MARKETING POSITION BE FILLED?
AL: I would think in four weeks or so. The quality of candidates coming forward is sensational, from all walks of life – football, the Middle East, local guys. It’s going to be an interesting exercise. The first process is to sift through to four or five candidates, then a selection committee will interview those individuals.
WHAT ABOUT THE MANAGING DIRECTOR?
AL: The MD is a more challenging role for obvious reasons. It could take three months to find the right guy and beyond that anybody with any quality is going to be on a notice period, so with the best will in the world, the parameters could be three to six months.
These people aren’t normally out of a job and if they are, there’s usually a reason for it.
IT HAS BEEN SAID THAT STEVEN PATTISON WILL BE STEPPING DOWN AS A DIRECTOR. WHAT IS THE LATEST?
JN: We’ve had an EGM of the holdings board where we had to take some big decisions. It’s progressing from there. There’s no complication; we are managing it and don’t see anything getting in the way of it. As with everything the legalities have to be put in place.
AL: This is a transition; there’s going to be no violence or hostility. Poking sticks at people isn’t going to help anything.
WHEN WILL THE NEW MONEY PHYSICALLY BE IN PLACE?
AL: Middle of June.
ANDREW JENKINS’ LOANS ARE BEING CONVERTED INTO EQUITY – CAN YOU CONFIRM THAT IS THE SAME WITH JN’S £20,000 LOAN?
JN: Yes. I won’t be taking my loan out. I’ll be taking it out to put it back in again.
AL: The whole thrust of this is nobody gets any money out. I only want money that’s going into the football club.
WHEN WILL THE FULL LINE-UP OF INVESTORS BE IDENTIFIED?
AL: We’re raising £1.25m, so there is slack. I know there’s people out there who would like to invest, I just haven’t spoken to them yet. It’s rather like building a book of investors. The platform’s there now so now I can talk meaningfully in the knowledge that what these guys are putting money into is real.
YOU’VE SAID £800K HAS ALREADY BEEN PLEDGED?
AL: Yeah, but I haven’t had a real push yet. I have to draft what I’ve called a prospectus – an information memorandum for legislatory reasons. If you talk to more than three people, you have to produce a document that has to be verified by accountants and lawyers. You can’t walk down Warwick Road handing out share certificates. Somebody emailed Robin [Brown] from Australia this week that wants to put money in, who’s ex-Carlisle. Another couple of guys today have been in contact.
HOW WOULD THE STRUCTURE OF THE CLUB BE AFFECTED IF YOU RAISED SIGNIFICANTLY LESS, OR MORE, THAN £1.25M?
AL: With any kind of fundraising you want to raise a minimum amount. If there was a shortfall we’d have to pro-rata the shareholdings. Those who’ve got shares now would be diluted less.
WHAT ABOUT A YEAR OR TWO DOWN THE LINE, IF WE’RE STILL STRUGGLING – WOULD THE SAME PEOPLE INVEST AGAIN?
AL: I see this as being rainy-day money. If we sold a player or had a cup run, we’d try to keep that number in the bank account. Because that’s important for signing off the accounts and solvency rules. We don’t want to be in a position of not being able to sign the accounts off because we can’t prove our cash flow is strong enough. That’s where Andrew Jenkins has been sitting in the hot-seat and it’s not a pleasant experience. That’s what we’re trying to avoid.
JN: Steven and I have had to back [AJ] up on it and pledge our own. We’ve not had to pay any money but we’ve had to pledge it. We’ve also had to be in agreement with the bank that we would cover a third each.
AL: If there was a catastrophe and we needed some more money, we’ve got a platform to do it. The temptation, and I heard it in absolutely raw terms from Alan Steel at the trust meeting, was, ‘We don’t have to do anything, because Andrew will continue to fund the football club’. That’s just not a sustainable way to run any business, to be reliant on one individual who’s in his late 70s. It’s unacceptable.
WHAT ABOUT THE PIONEER LOAN?
JN: We’ve almost pinned that one now. The Pioneer loan will reduce slightly over this year and will continue to reduce, then it becomes a long-term creditor which is paid back over a period of time. We’re doing it monthly and they’ve also got some sponsorship. So we effectively go into – I know it isn’t totally – a debt-free type situation.
AL: You don’t want short-term loans on your balance sheet, because short-term loans become part of your solvency test and if they’re shorter than 12 months they march across the balance sheet and give you all sorts of problems. It’s effectively going into the long grass.
HOW LONG WILL THE TRANSITION PERIOD FOR A NEW MD LAST?
JN: If it’s somebody out of the football industry, it will be a fairly short period. Showing him where things are, passing on contacts. I would hope within a period of two to four weeks. If the person isn’t from the football industry then it would probably be a bit longer.
WHAT IF A BIG DECISION FELL ON THE CLUB IN THE INTERIM PERIOD, FOR EXAMPLE A MANAGERIAL SITUATION?
JN: We know the constitution of the new board, roughly. It’s five-sixths done. Andrew Lapping has been in the loop on things like season ticket pricing, new players coming in and so forth. It’s consensual. If we meet a peculiar situation we will all get together and do it.
THE MANAGING DIRECTOR SALARY BAND OF £70-85K – WOULD THAT STILL APPLY IN THE CONFERENCE?
AL: I suspect, if we go down – which we don’t want to contemplate – we would probably try and combine the two roles [with sales and marketing]. But I don’t think we’ll be making an appointment of either in the next month.
WHEN WILL PLANS FOR THE TRUST, SUCH AS SEASON-TICKET ENROLMENT, KICK INTO ACTION?
AL: That’s a decision we can make without having an MD. It’s a board decision and can be made very quickly. What I’d like to see is the trust come forward with a proposal. It’s pretty clear they want to help and Norman Steel in particular has come through this with some credit for what he’s put up with, really. There’s a chance now for the trust to completely re-engage with the club and change itself. If I was in the trust I’d be writing my new manifesto now - a wishlist of how they see the trust interacting with the club going forward, and not just at board level. The ball’s in their court.
WHAT WILL THE NEW BOARD LOOK LIKE?
AL: It’s going to be two old directors, two new investing directors, the Trust and an independent chairman. The chairman is the key role. My view is it’s got to be someone from the area who lives and breathes the city, is reputable and has board presence. We’ve talked about four or five guys.
I sit on three public company boards and find I get more out of a board where the chairman says “jump” and you jump.
Personally I want someone who’s got authority and can command that respect. Basically that board is responsible for the long-term aims of the club and will be holding a new MD and team to account for performance.
HAVE CURRENT STAFF SOUGHT ASSURANCES ABOUT THEIR POSITIONS?
JN: They know everything’s on hold until there’s a new regime. But I’ve had meetings telling people not to worry at all. We’ll review the whole process with a new MD. You wouldn’t want to come in and do his job for him. He needs to have a period of time of assessment.
WILL THERE BE ANY MORE NEW PEOPLE JOINING THE CLUB?
AL: I think that review will be done by the MD. We wouldn’t want to be interfering with that. Normally with CEOs they spend their first 100 days reviewing and coming forward to the board with a plan, maybe looking at personnel, the way the club does things.
SOME PEOPLE HAVE SAID £1.26M ISN’T MUCH IN FOOTBALL TERMS – IS THAT FAIR?
AL: The ideal scenario in a good year we’ll make money, in a bad year we’ll lose a bit of money, but over the piece the club runs itself, that’s the plan.
I’ve been there with Motherwell. Some years we’d make £500,000, other years we’d lose £500,000. Over the piece, the aim was not to have to keep putting money in. The way to do that was have reserves, which you could dip into or replenish. My aim is to have the reserves maintained wherever possible.
JN: We’ve actually never had reserves. It’s been a fair struggle most of the time.
WHEN MOST INVESTORS ARE IN PLACE, WILL ANY WANT ANONYMITY?
AL: I don’t see anonymity; I was with one for an hour this afternoon, he’s got no interest at all in being in the press. I don’t really have an interest in being in the press. My aim was to help the club sort itself out.
JN: On our website now we’ve got to declare who’s got the shares. That’s Football League rules. It will become apparent who the investors are.
JOHN NIXON’S ROLE WILL ALTER WHEN THIS PROCESS IS DONE. WHAT WILL THAT BE?
JN: I’m going to help as much as I can, with a new MD coming in, because I live locally. I’ll probably end up doing a similar kind of role that Andrew Jenkins does now. We usually have to have one director as a signatory for the FA and Football League when we make a signing.
I don’t see Andrew and Robin Brown packing in work and saying they’ve got to go down to the ground because we’re signing a player. Also if we stay in the Football League I’ll look to keep the things I do with the Football League. I chair the Football League Trust and I’m on the FA Council. You get elected on these things annually. You could get to July and I find that I’m on none of them, or on more.
AL: I can assure you no-one else has expressed an interest in doing that role. It’s not a trapping of wealth or position! Somebody has to do it.
AND JOHN WILL BE CONTENT IN THAT PERIPHERAL ROLE?
JN: I’m content. I came into this in 2006 because Fred [Story] asked me. I was actually retiring. It’s something Andrew Jenkins talked about this year, before Andrew Lapping came along. ‘How the hell do we get off the merry-go-round?’ After June, Andrew goes into his 80th year. I hate to talk about this, he said, but we can’t keep going forever. I said to be fair, I’m doing this job for nothing. I’ve never really been comfortable with the publicity side, I’ve never wanted to be the frontman but I’m with a group of directors that, probably because of my Pirelli training, made it easier for me to talk. I’ve become the front end of it but I come in every day as the director that tries to manage. It’s almost a different role from the managing director.
AL: Often in football if someone pushes their head above the parapet and shows willing to do the good and bad bits, the others let them.
JN: I still intend, Andrew Jenkins and me, to go away to a few away matches and travel as we travel at present. Because these lads [Lapping, Brown etc] are working lads, they won’t be saying on Friday at 8am ‘We’re going down to Stevenage today’. Andrew Jenkins isn’t going to be chairman of the new board but he’s going to be seen to be the football chair in other boardrooms. I couldn’t go on forever. I’m quite grateful at the end of the day, albeit it’s a painful process when you let go of the rope, because I’ve enjoyed holding it.
PROJECT BLUE YONDER – WHERE IS THAT AT THE MOMENT AND COULD IT BE UP FOR REVIEW BY A NEW MD AND BOARD?
AL: I must admit I haven’t taken any real interest because I’ve focused on the football franchise and the longer-term stuff. Fans keep asking about the Blue Yonder stuff. With John’s connections, and John being involved with the developer, it would be insane to sever that connection. It’s something I’d expect John to be there for the handover when the new board decides what direction to take it.
JN: There’s nothing we’re specifically working on it at present. If it happens, fantastic, if not it’s not because we haven’t pushed the boat out and tried. It’s just a vision – we really need new, modern facilities, all-seating, good press facilities, restauranting facilities, seven days a week for conference and banqueting, probably nearer the town centre and railway station. And if that can be done, and the value the club has is in excess of £6m, on a peppercorn rent for 250 years which is what I’ve set as a target, then I’d be really pleased to take it back to the new board and say this is where we are. If it isn’t and doesn’t come … I just think it was right for us as a group of directors to try and find a better future for Carlisle United.
ARE THE CLUB COMMITTED TO A STADIUM SCHEME THAT THE NEW BOARD COULDN’T STOP?
JN: No. We’ve signed a confidentiality agreement that simply says we would work with this developer and this architect for the next 18 months. We’re 12 months down the line now. In six months’ time, that will be up for renewal. We’ll take it to the board and say do you want us to keep going with this or find a new developer, or whatever. The developer’s in London where they’ve got access, I’m told, to Middle East cash, these things you need to build shops and cinemas and everything that goes with them. We’re outside our box. We tried in the early days ... probably the big mistake we made was going locally. It didn’t work out. So we’ve gone nationally.
I THOUGHT YOU HAD MENTIONED A LOCAL DEVELOPER ON THIS?
JN: The guy, one of the people I’m dealing with, has local connections. But they are based in the south-east.
AL: If it’s going to happen it’s going to happen shortly, because the commercial world is such that the funding is around now. In Dumfries they got planning permission in 2006 to build their shopping area, procrastinated and when 2008 came along, nothing happened. I know a lot of fans would like to stay at Brunton Park. If you could take the planning gain and plant it on Brunton Park I think that would be quite a nice solution. I’m not part of it so I don’t know.
JN: It’s costing us nothing. The cost initially was about £12,000 to do a feasibility study in 2010 after we’d been to Wembley. But since then it’s not cost us a penny.
COULD MOVING THAT PLANNING GAIN TO BRUNTON PARK BE DISCUSSED?
JN: When we have the board meeting, if they ask to find out where we are, I’ll bring it to the next meeting and bring any confidentiality papers. I’d probably bring the developer with them to a meeting and let him talk them through it.
AL: Fundamentally we’re not going to get a new stadium unless we’re in some sort of agreement like that, because the cost of building a stadium would be £20 million. You have to ride on somebody else’s shirt-tails.
WHAT WILL BE REALISTIC TO EXPECT FROM THE NEW SALES & MARKETING PERSON?
JN: There is a lump of selling that’s repetitive and a good professional would ensure we do that. I’ve got to say over the last few years we’ve not – and I’ve poked it a bit as well – done it as well as we could.
The ground boards for example ... I expect the new guy would have that put into a picture fairly quickly. I think his flair is going to come in bringing in the bigger companies.
But he’s got to hold on to the corporates that are outside this county – Virgin, Pirelli, Stobart. Big ones like the Cumberland Building Society inside the county. Edinburgh Woollen Mill. He needs to hold onto them and add to them.
AL: We’ll set targets. We want to improve on what we’re doing. I was at the Newcastle Falcons game against Leicester recently and was blown away. It was like clockwork and it felt such a great experience.
Most of the fans there didn’t turn up at 2.50pm and go home at 5pm. They were there at 1pm, enjoying the facilities, entertainment, half-time, and stayed after the match because there was another game on, a young boys’ international. People were there for seven or eight hours and it felt like a day out. For me that’s where I’d want the marketing person to maximise what we’ve got.
SO THE MATCHDAY EXPERIENCE IS GOING TO BE A FOCUS?
AL: It’s basics in many ways. Buying a drink before the match has become a chore in the east stand. For some reason the bar staff are the wrong age. There was an experience a couple of months ago where there were seven or eight bar staff, but six were watching what the other was doing because they were on some sort of training programme. Train on another day – this is match day! Get it sorted!
JN: Some people say they now don’t queue for a pie, because they don’t get it until half-time has finished. They’ve lost that business.
AL: I was at Old Trafford for the Arsenal game the other week, I was in the Arsenal end because my daughter’s a big Arsenal fan. It was like Rorke’s Drift. At the bar there was three lines. A line of guys pouring the drinks, line of guys handing them to the front, who was taking the money. It was like clockwork, 9,000 Arsenal fans got fed and watered in 15 minutes. In the east stand, 150 people want to buy a cup of tea and I’m still standing there at 4pm, missing the match.
I would expect the new person to set an annual budget based on our budget. If it doesn’t come up to scratch they’ll be held to account for it, good or bad. If they do well they’ll get a bonus. That’s how the commercial world works.
HOW MUCH POTENTIAL IN THE SHORT-TERM DO YOU THINK THERE IS AT THE CLUB TO TURN THINGS AROUND, ON AND OFF THE PITCH?
AL: In monetary terms every fan is worth £11. A thousand fans, the missing thousand, is £30,000 a match. Times 23. It makes such a difference to the quality of player. You can bring in a player on £900 a week rather than £500 a week. The difference there is potentially huge. In Scottish football when I was involved, your average player was £1,000 a week, your good players were £2,000 a week, and there was a world of difference.
JN: The data from the Football League shows the average is £800+ a week for a player in League Two. It’s about £1,300-1,400 in League One.
AL: That’s £50,000 including NI. Which is one-and-a-half matches with 1,000 fans increase.
JN: It shows if you spend more on your playing side, you get a better league position. We’re actually paying above the average and we’re 21st. That’s a problem. It indicated to me that we’re either paying too much or we’re carrying on a legacy from different managers.
AL: Hearts used to pay players £3,000 a week, Motherwell £1,500. It didn’t mean they were twice as good but they would usually finish above us. If you get a manager who can get a team playing on £1,500 a week, you hang on to him, which is what we did with Stuart McCall and Billy Davies.
SO HOW KEY IS THE MANAGER IN ALL THIS?
JN: Some of the things we’ve gone through this year and last year, if we had results on the field, most of the problems wouldn’t have surfaced. When you don’t get results those problems surface and appear much bigger in perception. Then your income level starts to go down because people aren’t coming, then you haven’t enough to pay loan players to come in to get a better quality. We’ve been tumbling for two years and it’s difficult to stop, because it’s just a spiral.
BUT OTHER CLUBS HAVE STOPPED THAT SPIRAL QUICKER THAN US, LIKE SHREWSBURY
JN: Shrewsbury is a good example, they got a manager and it worked out, Micky Mellon. I talked to their owner, he put in £500k last year to keep it up, and £500k minimum this year. That tells you where they are. He knows he’s invested £1m in two years just to get them there. So there’s raw investment above the norm, they got a manager who understood Shrewsbury at the beginning of the season and built it all the way through. I talked to Ian Lenagan from Oxford … he put £8m into Oxford to get them into the league and hold them and they’re just above us. His deal is that he’s on the board for three years and he’s got to get £4m of that £8m back, and that’s a huge amount. Andrew Jenkins has put money in but not at that level. I’m hoping we don’t have to do that. Some of them work because they do throw money at it.
AL: My theory is the board has to be able to make decisions on the front foot rather than the back foot. Some decisions they’ve had to make here have been within the constraints of the Fred Story loan, the Andrew Jenkins loan, the fact you couldn’t raise any money because of the trust. Indirectly the club has been paralysed by it. I don’t think anybody realised it until the freefall started. If there’s a crime I don’t think anybody spotted it at the time.
JN: Well we did, we spotted it at the time. It was dead simple. There were three gates to go through. The first was Fred Story – any time anyone came in and said ‘can I put some money in the club?’, the first thing they said was you’ve got to remove the Fred Story loan, £1.1m.
AL: It was influencing transfer policy as well. It had to go.
JN: That took us some years to negotiate. Then you had the trust and investors were saying they might stop us doing what we want to do. We had to go through the issues and Andrew Lapping has been very helpful, particularly with the trust. We were part of the regime when the trust and Fred were at loggerheads, and tainted with it. Andrew has done a good job at persuading them to take a realistic look at what’s happening.
AL: It was the right thing to do. I think some were fixated with Fred, Kate Rowley, court, all the stuff that’s consigned to the dustbin. It’s gone.
JN: In fairness when Fred left in 2008 he said ‘it gives you lads a chance to start afresh with the trust’. And he was right, and we did try. But you couldn’t get over…
AL: Everyone thought you were Fred’s stooges.
JN: And we were to a degree, because this charge of £1.5m over club, which we gradually got down to £1.1m, was there and as long as it was there, every meeting or forum we had, people would ask ‘is Fred Story making the decisions?’ and we’d say no.
AL: But he was indirectly, because it was there. People didn’t realise decisions were being made with that at the back of their heads. My role here is to create a platform where decisions are made for the right reasons, on the front foot. So the club can breathe. I don’t think it’s been able to breathe for two years.
CAN DECISIONS BE MADE ON THE FRONT FOOT BEFORE THE MONEY IS IN PLACE, EG IN THE CLOSED-SEASON, IN THE TRANSFER MARKET?
AL: First and foremost...there are a couple of lads there that other clubs think they can nick for nothing. I want the message out there that we don’t need to do that any more. Let’s make it crystal clear that we don’t have to sell a lad like Brad Potts for half his value. That’s the kind of decision I’m talking about.
SO THAT PRESSURE IS BEING EASED?
JN: We’re still negotiating with Brad and Mark Gillespie. It’s an ongoing process. We’re keeping everybody in the loop, trying to get a settlement with Mark, then we’ll move back to Brad again. Brad’s had two offers, turned them down, so we’ll have to go probably again. That’s what happens when you’re in negotiation. Actually he never came back in the allotted time. He said he wanted to leave his foot in the door and negotiate. So we’ll try and find the right tools within the constraints. It can be different with a journeyman looking for a three-year contract and he’s only worth one. These are lads who have come through the system, have been good servants and have value to the club.
WILL THE NEW SYSTEM HOLD THE MANAGER ACCOUNTABLE IN A DIFFERENT WAY?
JN: If you do what we’ve done and don’t interfere, you hold the manager accountable. When it becomes apparent it doesn’t work…
AL: At Motherwell when we sacked Billy Davies, we’d lost 3-0 at Rangers and tried to kick them off the pitch. We thought, ‘we don’t play football like that’. It was time. Decisions were generally unanimous.
JN: I generally think crowds sack managers. Inevitably the crowd turning is the beginning of the process and sometimes it’s irrecoverable.
HOW FAR CAN CARLISLE REALISTICALLY AIM FOR, WHEN THESE CHANGES ARE IN PLACE?
AL: My opinion is we could get to the Championship but when you get there it’s a different ball game. There’s not much difference between League Two and One. In reality we should be a good League One side pushing for the play-offs and promotion. With a clean bill of health it’s onwards and upwards for me.
Premier League, I’d love to say that, but most Premier League clubs are owned by tycoons and there’s not a lot of tycoons in Carlisle.