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The financial situation that was inherited
The financial situation that was inherited

Sorting out the financial mess

As has been reiterated since the conclusion of the Trusts Rescue Package just over one year ago, the Trusts new company (York City Football Club Limited) inherited a financial mess that has needed to be sorted.  To save York City from the brink of extinction and to retain League status in 2003, it was absolutely necessary for the new Club to take on a financial burden from the old club.  Led by the work of Terry Doyle (Deputy MD and Finance Director), the Club Board has worked hard to ensure financial survival this season to be able to get matters on a firmer footing in the future.


 


As the Club itself has made clear, that financial burden is still being paid off this season and this has necessarily impacted on the playing budget that has been available to the Team Management.  All other things being equal, this has placed York City at a disadvantage to other clubs.  Therefore, this season, the new York City company continues to have to settle liabilities incurred by predecessors in relation to matters such as monthly payments for the benefit of creditors of the old club, pension scheme liabilities and the PFA loan to the old club to settle wages to players (that had been c.100k). 


 


Also on the cost side, under Footballs rules, the new Club inherited commitments in respect of employees as at March 2003.  That included half a dozen players who were on contracts through to June 2004.  It also included Messrs Dolan and Shaw whose contracts were terminated as part of the financial restructuring of the football club.  In addition, in September 2002, Batchelor had sold season tickets for the current 2003/04 at half price because, he claimed, a new sponsorship agreement had been entered into.  That was about 90,000 of money from supporters that went to the old club under Batchelors control.  The new Club agreed to honour the season tickets for the 2003/04 season, so fans did not lose out.  Despite recovering some of this money from those supporters who kindly provided a voluntary donation equivalent to the other 50% - the new Club has suffered a very significant shortfall from season ticket sales in 2003/04.


 


In addition to the financial burden that is being carried by the new Club in the 2003/04 season, as has been highlighted over recent weeks, the Club is now facing some significant additional shortfalls.  As folk are aware, due to circumstances not of its choosing, it was necessary for the Club to pursue the prospect of redeveloping the Huntington Stadium.  Following the announcement in February 2004 that an agreement has been reached in principle to enable the Football Club to continue to play professional football at Bootham Crescent for the foreseeable future, planning costs of around 60,000 became payable by the Club.  Also, the Press has recently reported that over 40,000 remains outstanding from Batchelor and is an additional shortfall facing the Club in the 2003/04 season.  Under an agreement entered into in March 2003, Batchelor agreed to make an ex gratia payment of 85,000 to the Company in Administration for the benefit of the creditors and to assist with enabling the future of a professional football club in York. 


 


As you can appreciate, it has been a major challenge to manage the Clubs finances this season (a business with an annual turnover of around 1.5m), in particular due to the inherited financial burden and the additional shortfall (of over 100k) that is being faced.  The Battle for Survival (on and off the pitch) goes on.


 


 


Fundraising, fundraising, fundraising


 


Fundraising remains vitally important for the Trust and the Club.  Your Club needs your support.  Please do whatever you can to support upcoming fundraising events and schemes some of which were outlined in last Tuesdays programme and are on the Trusts website at www.ycst.org.uk .  And if you have an idea to raise some money for the benefit of City, please get on and do it.  The Trust can provide support if you wish, so please contact Kirsten Gillies or any other Trust representative via the Club or enquiries@ycst.org.uk


 


(from Trust News in the match programme on 17th April)

 
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