The Freehold

These could be the most significant times in the history of Plymouth Argyle Football Club.

Overblown hyperbole? I don't think so; not this time.

Readers of these pages may recall an earlier comment on the "What Next?" entry where I said this:

The club is hamstrung by it’s tenant status. We are unable to borrow money using the ground as collateral because it is only rented from the council. The only assets we have we could borrow against are the market values of the contracted playing staff, furniture, fixtures and fittings and whatever cash we have in the bank.

Well it looks as though we will not be hamstrung anymore.

Recent events have seen the news emerge that PAFC has been in negotiation with Plymouth City Council with regards to buying that very same freehold. A bid has been lodged and accepted and barring the inevitable objections from opposition within the council it appears to be a done deal.

At last we will be free of the handicap of tenancy. All reports from the club are upbeat. The mood of supporters is generally positive about the issue. But...

There's always a "but" isn't there?

I am not convinced. In fact I am very, very concerned but my voice just seems to be one of very few. No matter how I try to reconcile the facts, such as they are, a nagging doubt just will not go away.

At the root of all of this is the need to build P2 and complete the redevelopment of the ground. There are some who say the team should come first but I do not agree. The case for P2, to my mind, is utterly overwhelming. The project, quite simply, must go ahead.

The blot on the landscape here is how to pay for it and that is where the Freehold purchase comes in.

For a long time now I have lobbied for the building of P2. My position was not without riders though. P2 must enhance stadium capacity and it must be done "properly" leaving the club with an asset that will stand it in good stead for years to come and not be hastily thrown-up and cheaply done. I cannot see the logic of spending mi££ions and ending up with reduced capacity. That option will never enable us to compete at a higher level. If that happens then what we have now is as good as it will ever get. We may as well not bother.

Paying for it is the issue. The bigger it is the more it will cost. A 10 000 seat stand will cost around £10m to build and leave us with a total stadium capacity of around 23000. This, it seems to me, is the bare minimum that we should be bothering with. It is a compromise between audacious ambition and hard-nosed realism.

So how do we raise £10m? Well in the past I hoped that grants from the FA may be forthcoming, that the council may help, that he club had squirrelled away some cash, that the directors would put some money forward, possibly some other outside investment in the form of sponsorship or similar and that relatively small loans could make up the balance. By hook or by crook, in this manner, P2 could have been funded.

So what is wrong with buying the freehold? It will make borrowing money much easier and that can only help.

Well, we have squirrelled away some money. Around £2m according to the recently published accounts. Unfortunately we are committed to spending that and another £750 000 on the purchase of the freehold.

Already we are in the red to the tune of the best part of a mi££ion. The council will now not be "obliged" (if they ever were) to contribute. How much would they have put in? Shall we say £3m? The loan we require is up to £4m so far and we have still to find another £7m (?) for the estimated cost.

All told I reckon we need to borrow at least £10m!! Probably more. I wouldn't be surprised to see that figure actually rise to something more like £15m and we have not spent a penny on players or other budgets yet!!

We have never carried anything like that sort of debt before. Partly because we weren't allowed to go that far in the red and partly because we knew we could never contemplate paying it off.

What if we get relegated, income plummets and payments cannot be met. What happens then? Well either the land gets taken over by the lender or we have to expect the current board sell up to... Who exactly? Anybody with a big enough chequebook. He could then do whatever he likes. We could be asset-stripped and sold down the river. Can't happen? Look at the histories of Brighton and Wrexham, to name but two.

So where will we be in 10 years time? Who knows? We probably will not be a defunct asset-stripped relic plying our trade in the SW League (Newport County - there's another one) and we probably won't be lifting the Champion's League Cup (what is it called these days?). We will probably be somewhere in-between.

I can see that buying the land makes good sense. It is probably undervalued and the price favours us. I also see us paying £2.75m for the privilige of being able to go £10m in debt and that does not favour us as far as I can see.

As ever the lack of detail and the absence of any vision-type statements from within the club leaves us all guessing but one thing is certain: P2 is now 4 years in the planning and we still do not know how big it will be, what it will cost, how we might pay for it, what facilities it will include and when it will start!!

"Frustrating" does not even begin to do it justice.