Here is the transcript of the meeting between PETER Ridsdale, who is acting as consultant to the Plymouth Argyle board of directors, Mark Pedlar and Pontypool Green.
This session is also on the OS.
Q: Bearing in mind the negative press we’ve heard from the Press and fans of your previous clubs, why should we place our trust & faith, and perhaps the very existence of our club, in your hands?
A: That will be determined by the outcome
I’m more than happy for anybody to set aside and hour, two hours, an evening, whenever they want and ask me any question about my time in football.
People slag me off but I believe my track-record, in reality, is far better than anyone would allude to from the outside. Cardiff were about to go out of business five years ago and are now doing well in the Championship, with a new stadium, a new training-ground and have played in an FA Cup final and a Championship play-off final.
They had no new cash in that five years, and yet pulled in £30m from player sales and did better every year in the league. It would take some doing to beat that.
Leeds? When I left, it was a public company with two of the biggest high-profile businessmen in the country on the board. We got to a Champions’ League semi-final, a UEFA Cup semi-final, and were never outside the top five when I was chairman, yet apparently it’s all my fault 18 months later, when it all goes wrong.
Did I make mistakes? Of course - I’m a human-being - but I would still pit my track record in football against most, and am happy to defend it at any time.
Here, now, is a massive challenge. You probably do not have any option but to put your faith in me because without somebody this club won’t exist, and, even with me, it might not. It depends on the challenge and how I respond to it.
But I’m here to do my best and I will do my best because I care passionately about what I’m doing and I’m trying very hard to do the right things for Plymouth Argyle.
Q: Are you looking to join the club permanently?
A: That’s not in my hands. I originally got involved with the club because I have a group who want to buy a football club. We tried to buy Hull and weren’t successful. We came here to talk about investment. The numbers I was given turned out to be not a true reflection of the size of the problem. It meant that level of investment required wasn’t justified.
I happened to know Paul [Stapleton] through football and I said: ‘These numbers are crazy’. I do believe the true numbers weren’t readily available to all board members. I said: ‘If you want some help, I’ll give you some help’ and I agreed to stay before the day we are due back in court, on February 9.
Depending on what happens on February 9, they can say ‘Come back’ or ‘Thanks very much’ and shake my hand.
Q: Does your involvement with an investment group preclude anyone else’s investment?
A: Absolutely not. In fact, I am encouraging the directors to find anybody who is prepared to invest because there is an urgent need for cash. Unless that urgent need is addressed, this club will not exist.
Q: Why don’t we take a 10-point hit and go into administration?
A: This is not a debt problem. This club’s debt is not huge. It’s manageable. But it’s only manageable with cash. The biggest problem this club has got is that an administrator would need cash to keep the club going to find a new buyer. The club has no cash, and an overhead-base which is too high.
I am not convinced that, if we went into administration, we would come out again. Administration, in my opinion, should be avoided at all costs.
Q: Is liquidation still a possibility?
A: A high probability. We had a winding-up petition from the Inland Revenue which we have successfully paid off. We still have an Inland Revenue bill which is not subject to a petition but will be if we don’t pay it. We have paid about half that. In a short space of time, we have almost paid the Inland Revenue up to date, which is a massive achievement.
But, we’ve got creditors from a development that has never happened; we haven’t paid for some of the on-going operations; we’ve got a wage-bill to pay at the end of the next five months, and revenue to pay as we go through. At the moment, the only income we have got is the little we get from gates beyond the original season-ticket sales. And nothing else.
Unless the club can find a means of bridging the cash-requirement between now and the end of the season, when it can re-organise its overhead base, it can’t trade.
Q: How do you think that’s achievable?
A: That’s not an easy answer. We’re trying our best.
We’ve doing a lot of things. One is selling players, another is reducing the overhead-base here in ways that has an immediate impact – Paul Mariner went, for example, and it didn’t cost us anything for Paul to go. We have reduced the cash-requirement from where it was before Christmas until now by about half.
However, we have had a commitment which was given in open court from the Japanese shareholders that they would put an amount of money in. If they do that, we would, in my opinion, get through to the end of March, maybe the beginning of April.
We are also working on the bigger picture, a complex arrangement which may involve a sale-and-leaseback on the stadium where we pay off the mortgages and are still left with some residual cash – that would get us through to the summer to sort it out.
However, if they don’t put the money in, we have got a major problem; if we can’t do a sale-and-leaseback, we have got a major problem.
We are talking to people, potential investors, on a daily basis, to see if we can bridge the gap, but I am still requiring those who said they were going to do something to deliver, and, so far, they haven’t.
I wouldn’t still be here, if I didn’t think it was achievable. If the Japanese don’t put the money in they’ve promised I think it’s 30-70 against survival; if they do, I think it’s 60-40 in our favour that we will survive.
Every day, the picture changes. Last Tuesday morning, I thought we’d be able to pay the Revenue everything we owed them; last Tuesday night, I knew we had a problem because Bradley wasn’t going to Reading.
Q: What is the situation with the wages?
A: The December payroll was paid in full to all the staff and all the players; November was paid in full to the staff, and part paid to the players, who were then given individual loans by the Professional Footballers’ Association, which made up some of the balance, and, in some cases, all of the balance.
Q: What percentage of the club’s current income is needed for wages?
A: 120? I might have that wrong, but more than 100%.
Q: Will that ease in the summer?
A: Part of the problem is that when you contract players, you normally do it for two or three years. Unless you put in relegation clauses, you are left with too high wages when you get relegated.
When you get relegated from the Championship, your income goes down by about £3.9m, overnight, with no parachute payments, and your wage-bill stays the same, subject to who comes and goes.
Everyone tells me that our problem is automatically solved in the summer because so many players are out of contract. My answer is that you have got to look beyond that because we will only have a small squad of players and some of the highest-earning players will still be here.
We have set ourselves a wage-bill in line with the recommended wage-to-turnover ratio, if we are to be here in the summer, and we have to get to that to go into next season.
Q: Is there any way that shares could or should be offered to fans?
A: At this moment in time, unless we find a big investor, it’s almost irrelevant. Unless someone is going to put £2-4million in, I’m not sure what that achieves.
There is an urgent need for cash. There is a very complex arrangement of shares and put-options and all sorts of things that needs tidying up. I don’t think we have got the time for a new share issue at the moment, to go through the legal work of putting it together and sorting out what is already there.
Q: What is the size of the cash-hole that needs filling?
A: I was told it was a pot-hole. It was a chasm.
Q: Some fans have asked why there wasn’t a half-season ticket?
A: There was a consideration about half-season ticket but I couldn’t recommend it to the board. I told them that it would be inappropriate, legally, to take money off supporters for games that we might not be able to play.
Q: Who owns the ground?
A: Plymouth Argyle Football Club. There was a proposal for it to be transferred to Home Park Properties Limited, but that never took place. It is owned by the football club. It has a mortgage on it. I believe the only director of HPPL is Keith Todd.
Q: Do HPPL have any impact on anything that happens at the club?
A: No. We are in a group VAT scheme, so PAFC Holdings, HPPL and the football club are all part of one single VAT scheme, so when HPPL and the parent company were in court, it was over the same VAT bill. Had HPPL not existed, the bill would have been the same.
Q: Have you met with the council?
A: I have met them and spoken to them. Things are politically sensitive because there are cuts taking place around the city. Let’s just say I have found them sympathetic and supportive and they will do what they can to help to help as long as it is appropriate for the city as a whole and for the taxpayers.
Q: Are there any thoughts about selling naming rights to the stadium?
A: I would love to. We are trying hard to find people who are interested. In fact, it could be the single solution to save the club. We haven’t had any positive response yet.
Q: Has any thought been given to ground-sharing with Plymouth Albion?
A: I believe, prior to my arrival, there might have been some strategic plans that would have looked at ground-sharing, but I have had no conversations about that as a result of the immediate problems.
Q: What is the monthly revenue payment?
A: It varies, because of win-bonuses or whatever, but in round terms, it’s £250,000. Maybe slightly more. For the whole company.
Q: The city has got obvious historical links with the USA. Have you looked for investors from there?
A: Of course.
One of the problems the club has got is ‘How do you value it?’ It’s almost impossible. When I was looking for investors for Cardiff, I went to some professionals in London who told me what a Championship club was worth if it had its own stadium, etc.
You have to assess the debts in terms of creditors and the asset-base: our stadium’s mortgaged – for, in round figures, about £4m; what is the playing squad worth?; how much cash do you need to keep it going?
The honest answer – today – is that I would give you a quid for it and I’d probably be overpaying, but I would be taking on all the liabilities.
For the amount of cash you would have to put in here to keep the club going, you could buy a lot of other clubs that might be more attractive.
That’s why we’re trying to reduce the size of the hole to the point where it’s worth an investor coming in and paying the balance.
I said to our shareholders: ‘If you put some cash in and save the club, we can create some shareholder-value, so instead of your shares being worth £1, they might be worth £10. If you don’t put any money in, they are not even going to be worth £1.’
Q: If someone came in and said they would take the debt on but wanted control and didn’t want any of the current directors in, what would the reaction be?
A: I have told the shareholders, very bluntly that, if someone walks in here and can show they can keep the club going that – legally – they have no option but to say ‘Here’s the shares.’ But it’s their decision, not mine.
If anybody walks in with a £1 coin and wants a 100% of the shares and can demonstrate to the satisfaction of the current directors that they can take on the liabilities, pay the creditors, and therefore keep the club going, I think the board has no option.
It’s a personal view. The alternative is that the creditors will take a view of what they have done and take whatever course of action.
Q: How much is the debt?
A: It’s complicated but I would have thought if someone had £6m and a £1 coin, they could probably buy the football club.
Q: What should a club’s wage-bill be?
A: You have got clubs that are on quarter of what other clubs are on. The key on wages throughout football is: who owns the club?; what are their aspirations?; how deep are their pockets?
If you assume there is no sugar daddy involved, look at the crowd. The wage-bill ought to be 50-55% of the income which that drives out.
The easiest way of solving our problem? Every 1,000 on the gate over a season puts another £500,000 net cash in the club
If we could get our crowd to 12,000 for the rest of the season, that’s equivalent to £1m into the club.
Q: Where do you see the club in five years time?
A: I couldn’t tell you. If I could tell you where it was in July, I could easily answer that question. I could not tell you if this club will be in the Football league in July with any honesty. Where the club ought to be in five years is either in the Premier League or fighting at the top end of the Championship to be in the Premier league.
It has the catchment area, it has all the infrastructure for a top-end Championship football club – just the same as Cardiff had. Unfortunately, there’s another hurdle to climb before you can even have that conversation, and that hurdle is survival.
Q: Are there any plans for Peter Reid to bring in an assistant?
A: Clubs like ours will succeed based on what happens on the park and I think football has been secondary to a lot of other things over the last 18 months. If we have any spare cash and if we believe that if, by allowing Peter to change his support in the coaching area, it would help on the field, which would help the gates, I would recommend that we do something about it.
I keep saying it, and I am not sure people are hearing it, but unless the Japanese put the money in, the odds are 30-70 against survival in my opinion.
Q: Do you enjoy the challenge?
A: I wouldn’t be away from my wife for five days a week for nothing if I didn’t enjoy football and didn’t think Plymouth Argyle Football club was a club that had a real opportunity to get it right.
There’s a massive upside here, but there’s a massive short-term hurdle to get over.
When I came to the club recently, it was the first time I had been at the club for 30-odd years that I didn’t feel like it was a football club. It was a property development, it was all about the World Cup. They had forgotten it was a football club. You can’t. That is your business.
I am in the luxury position that the problems are not of my making , and, to the degree that we can do something, we will.