How Much Would Regime Change Cost At Lincoln City.
The rumour mill has suggested that Bob Dorrian and Lincoln City Holdings have turned down bids from those who would wish to take over the club. Indeed Mr Featherstone had suggested at the recent Directors forum that he was talking to parties and had planned to invite them to the subsequently postponed Leicester friendly. But what would Bob want and what could the true cost finally run to?
Thank you for reading Neil Gentleman-Hobbs
No one knows what Bob would want although Lincoln City Holdings would come as a package, netting a handsome profit for the partners in LCH. Well except for the Trust who have seen their shares fall from 50p to 10p.
The historical losses and overdraft facility would suggest an investment of £2 million to clear the debt and give us 700k to either put into the budget or pay LCH off. They would presumably buy the trust shares and trouser the winnings for themselves. In reality there is a bigger prize in it for LCH, namely the site the ground is on. What value they and the council put on that in terms of redevelopment and subsequent rates income is vast.
Pour yourself a drink, as we attempt to delve into the figures, it is both lengthy and frightening. The current overdraft facility has been reduced to £350,000 – the Co Op Bank’s decision not the club’s. Bob is now suggesting the club is losing 10k a week, a figure we heard just prior to the Holding Company’s first intervention last year. A 2000 attendance figure was laid down at the agm, but this new 2800-3k break even figure suggests they have not stopped the rot, let alone got any control on what is going on. The managers transfer antics is a pretty good guide. The club will bring in 1.2million this year with a pro budget of 580k. This leaves 600k going out on Lord knows what … with the board suggesting we were going to need 150k by November (3 cheers for the holding company golden handcuffs just around the corner then).
Now to the historic losses. Over the last 4 years LCFC have lost well over £1million. The Chairman now tells us we are losing £10k a week unless we average 2800-3000 gates, this in itself is not precise enough for me as cash-flow forecast spreadsheets cannot be based on such fundamental and thus flawed variables. This would take our losses to around £1.3million over the last 5 seasons. With approximately £800k of investment during this period, all of it has been used to prop up the business rather than set realistic budgets. You have to ask yourself, would any of the Board of Directors run their own businesses in such ludicrous manner.
The signs were there in 2006 and 2007 that without success the Club were going to be in very serious position, with the possibility of a second administration. Decisions should have been taken in January 2008 to start preparations to balance the books from 2009 onwards. With the average loss running at over £250k per year the time has come for the Chairman and the remaining Directors of Lincoln City Holdings Ltd to issue a statement to the effect they are prepared to listen to any investment offers to buy their shareholding at the nominal price of 10p each as they themselves have shown in the ‘return of allotted shares’ submitted to Companies House.
It is worth remembering that around one million shares were donated free of charge and a further 500,000 at a considerably discounted price. In return for this the new investors(s) should guarantee to inject a further £250k when buying LCH total shareholding, followed by £250k per year for the next two years. By issuing a statement the Board would let all potential investors know exactly where they had to pitch their offer. If more than one investor was prepared to pay the asking price then they could put forward sealed bids over and above the minimum requirement. Subject to all the necessary due diligence checks being carried out and accepted, the highest offer would win. If the Board of LCH expect to get 50p per share for all their shareholding before considering any offer, then we would all know why LCH was set up. It definitely was not because they have the Club at heart, but to make a profit for themselves.
Right Mr Chairman, show leadership and put a serious package together, to allow any potential investor(s) to decide whether or not to pursue the matter further. Do nothing, keep investors at arms length, and the demise of LCFC may come quicker than may expect. The choice is yours Mr Chairman, as is the fans decision to give their support or not.