A football finance expert has said he believes Yeovil Town’s future is secure – if the club’s owners have a long-term interest.
Kieran Maguire, who co-hosts the Price of Football podcast, spoke to us on the latest edition of the Gloverscast podcast after the publication of the accounts of Yeovil Football & Athletic Club, the business which runs the club’s football operations.
It showed that during the 12 months to June 30, 2021, the club lost just under £400,000 which takes the overall losses of £2.22m.
However, there nine months have passed since the period these accounts cover, and we know that the club has loaned an extra £309,000 from Sport England since then taking the amount it owes up to almost £1m – read more here.
Summarising the accounts he has looked at, Kieran said: “It’s not in a great position, it’s not in a terrible position necessarily, but things have happened since these figures which go up to the end of last June.
“If you look at the accounts, it owes a lot of money to the parent company (Yeovil Town Holdings) and if it asks for that money back, we have a problem because the money is not to pay that back.
“However, reading the small print of the accounts, the directors say that the parent company is not going to ask for the money back until the football club is in a strong enough financial position to do that.”
Of the loans which have been taken out from Sport England, he added: “Presumably Sport England has done its due diligence and is happy to lend, those loan facilities were close to a million pounds one or two weeks ago.
“When you take a look at the details, a lot of the money is owed to Yeovil Town Holdings who say ‘we aren’t in a hurry for that money’, Sport England are the same.
“Worst case scenario, if Yeovil Town were to cease trading today there could be an issue but that’s not going to be the case.”
Kieran also explained what he meant when he described the club as “technically insolvent“, meaning that the money it owes is more than it has. “It’s negative equity to use a term people are more familiar with,” he explained, “we did a recent study and found 52 clubs in the Premier League and EFL are technically insolvent and no-one is saying they are all going to go bust.”
The ‘parent company’ referenced here is Yeovil Town Holdings, the business set up by former owners Norman Hayward and John Fry to own the land around Huish Park back in 2010 – and both companies have the same directors, chairman Scott Priestnall and fellow director Glenn Collis.
So, technically the club is lending to itself and has been for the past 12 years albeit with Messrs Hayward and Fry footing the bill up until 2019 and now Mr Priestnall is doing so.
There are further complexities thrown in by the fact that the money borrowed by CV Leisure, the business Scott Priestnall used to buy the club, being secured against the clubs assets – namely its stadium and the land around it.
But, the bottom line is, as long as there is an owner in charge who has a long-term interest in the club.
Last December, the chairman issued a long statement – read it again here if you are feeling brave – where he said: “Selling this club has never been my desire.”
You can listen to our chat with Kieran in full – here – which starts about 30 minutes.