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Trust newsletter about the arrangements relating to BC
Trust newsletter about the arrangements relating to BC

Bootham Crescent...at the heart of the community

As many of you will already know, the Board of York City Football Club has now issued a Statement regarding the next stage in the process of reuniting the ownership of Bootham Crescent with the citys football club.  The stage that has been reached is, in effect, the product of negotiations that first commenced last summer.  During that time, the Trust Board has been kept informed of progress and representatives of the Trust Board have provided support to the Club Directors.

The legal and business aspects of the process of the Trust and the Club gaining ownership of Bootham Crescent are far from straightforward and it is inevitable that many people may, to some extent, be frustrated by the complexities involved.  It is the complexities involved and the many issues that have had to be overcome that have delayed the release of the full details until now.  This has been frustrating for supporters and we thank all those people who have kept faith.  Football is a passionate business and there is, understandably, a keen interest from some quarters to know about, and comment on, the operations of the York City business and the actions (perceived or real) of the Club Board.  Going forward, inevitably there will again be occasions when some peoples frustrations will build about certain matters please, keep the faith.  As a Trust Board, and as supporters and the guardians of the Club, we aim to continue to remain focussed to work for the best interests of York City Football Club.

This Trust Newsletter supplements the information provided by the Club to help provide a better understanding of the issues involved.  It is necessarily lengthy, but hopefully of interest and use to those who read it.  If anyone has any further questions about matters contained in this Newsletter, or about any other matters involving the Trust and/or the Club, please contact a Club/Trust Board member and/or email enquiries@ycst.org.uk .  In due course, via the Trusts website at www.ycst.org.uk , we will publish a summary of any questions and answers.

Please note: this Trust Newsletter provides summary information about the proposed transaction and associated matters.  For BCH shareholders, it is not a substitute for the Circular document itself which BCH shareholders should refer to.

For over two years the Trust has continued to hold the principle that York City should not be ousted from its Bootham Crescent home unless and until a better facility is put in place for the Club to play its home games.  Going forward, the Trust Board intend to continue to hold this fundamental principle.

Hands on Bootham Crescent an overall summary




  • Just over a year ago, whilst many people considered that the York City business was beyond salvation, and with the threat of being ousted from Bootham Crescent casting a dark shadow, the Trust rescued York City from the brink of extinction.  This provided the opportunity to fight for the Clubs home.  Through the efforts of true City supporters, the negotiated ground solution provides the basis for long term security and a better future for York City at the heart of the community.


  • The Club will be paying 2.1 million to obtain a 76% controlling interest in BCH, which currently owns Bootham Crescent;


  •  Upon completion of the arrangements which it is hoped will be concluded before the commencement of the 2004/05 season - ownership of Bootham Crescent will be under the control of the Trust and the Football Club.  The ownership of Bootham Crescent is being reunited with the Football Club;


  • York City will receive a 2 million loan from the FSIF (a partner company of the Football Foundation), on which the Club must pay interest and adhere to certain conditions;


  • Persimmons agreement with BCH to acquire Bootham Crescent will be cancelled;


  • Details of the arrangements are set out in the legal document to BCH shareholders.  The shareholders include around 150 City supporters who between own about 6% of BCH;


  • The Club will work towards moving to new 10,000 all-seater stadium in York in ten years time.  In due course, the Club will sell Bootham Crescent and will reinvest the proceeds in the proposed new stadium;

York Cityat the heart of the community

In March 2003 the Trust put in place a six-strong Board of Directors to its new company, York City Football Club Limited (the Club).  Like the Trust Board, each Club director provides his or her time on a voluntary basis.  Over the past 18 months, much has been done to ensure financial survival and to implement the Trusts Community Vision and these have been vital aspects helping to deliver the long term ground solution.  The financial burden that was inherited and the issues that have arisen since have been dealt with and overcome.  No-one should underestimate the immensity of the financial challenge over the past year or so.  Financial survival was, and is, an imperative for the long term ground solution to be delivered.

The Club Board deserve much credit for their hard work and achievements over the past year or so.  The negotiations and work to stay at Bootham Crescent became known as Project Gold and Jason McGill, now Managing Director, has driven and led the project from the start.  Other Club Board members have contributed, in particular Terry Doyle on the legal and business aspects over the last few months.

York City is about far more than its Football Team.  The Club is not only a place where local people come together to watch football in a safe and friendly environment, but also a means of delivering community and education work.  York City is widely recognised as a major asset to the City and region and it will now be able to stay at its home at the heart of the community.

Ownership of Bootham Crescent in the hands of York City and the Trust

The details of the proposals for York City to gain ownership of Bootham Crescent are set out in a Circular to the shareholders of Bootham Crescent Holdings plc.  The Circular is a 20-page legal document that includes the notice to shareholders of a BCH EGM, separate letters from each of the Chairman of BCH and from Jason McGill of the York City Board, a summary of the City Code on Takeovers and Mergers and details of the proposed transaction itself.

BCH is the company that owns Bootham Crescent and land on Wigginton Road and some land near the Bumper Castle.  At present, BCH is a Public Limited Company and this status has given rise to a series of complex issues that have needed resolving.

The Trusts company, York City Football Club Limited, will be acquiring a majority shareholding in BCH.  Subject to the shareholders voting to re-register BCH as a private company and amending the Memorandum and Articles of Association, the Club proposes to acquire 75.89% of BCH shares for cash payment of approximately 1.8 million.  Additional further sums payable by the Club means the total amount of the initial transaction is approximately2.1 million.

Just to be clear: the ownership of Bootham Crescent will be under the control of York City and the Trust.

Extraordinary General Meeting of BCH

BCH will be holding an EGM in July to consider the resolutions.  As a consequence of re-registration of BCH as a private company, shareholders will lose certain rights under the City Code on Takeovers and Mergers.  If York City acquired 75% of the shares in BCH whilst BCH was still a public company, it would be required to make a mandatory offer to acquire all of the remaining shares on the same terms as those acquired.

However, York City does not have sufficient funds to make an offer to acquire all of the shares of BCH and, if it was required to do so, it would not be able to proceed with the transaction.  However, the Club has indicated that following the proposed transaction it will be their intention to acquire all of the remaining shares in BCH when it becomes commercially practicable to do so.

Financing of the transaction

In order to finance the proposed transaction, York City will enter into a loan agreement with the Football Stadia Improvement Fund (the FSIF).  The FSIF is a partner company of the Football Foundation.  After much negotiation over the past year, the FSIF has agreed, in principle, to provide a loan of 2 million to York City.

Not surprisingly, in view of the amount of money they are lending to the Club, the FSIF have made it a condition of any loan they make that they are provided with security.  The deal that has been reached in principle is specifically structured to allow this to take place without breaching the provisions of the Companies Act.  The FSIF will be granted a fixed charge over the Bootham Crescent site as security for the loan immediately after the acquisition of the shares in BCH takes place.

The FSIF loan to York City will be interest bearing (at 0.5% above the variable base rate).  On the basis of current interest rates, it will cost York City approximately 100,000 per annum to service the loan.

There are also certain key milestones associated with the loan, including:




  • A new stadium site within the City of York boundary to be identified by January 2007


  •  Detailed planning permission for a new stadium to have been obtained by January 2009


  •  Financial penalties will be imposed on the Club if these milestones are not achieved


  • York City to move into a new stadium for the start of the 2014/15 season.

What about the shortfall between the initial cost of the transaction and the 2m loan?

The aggregate amount payable by the Club to complete the transaction is approximately 0.1 million greater than the 2 million loan from the FSIF.

Over the next couple of months, the Trust will seek to raise new funds from supporters to provide money to the Club to help meet the shortfall.  In due course, the Trust will be announcing details of a new fundraising scheme.

Over the past two and a half years, we know that many people have already given a lot in terms of time and money.  However, once again, the Trust will be calling on Citys supporters to dig deep and help fund the buying back of our Bootham Crescent home.  This is a historic opportunity to reunite the Football Club and Bootham Crescent and help provide some much needed security for the Club to move forward.

A future new stadium for York City

In outline, the Club aims to have in place by 2014 a 10,000 all-seater stadium, with superior facilities to Bootham Crescent.  York City will remain at Bootham Crescent until the new stadium is completed.

It is intended that the initial loan from the FSIF will, in effect, be converted into a grant from the same body to invest in the new facilities.  The residual equity from the sale of Bootham Crescent will also be used to assist the funding of a new superior stadium.  When Bootham Crescent is sold in future, the benefit of the sale (over and above the monies owed) will be invested in new facilities for York City.  In conjunction with the Club, the Trust will be implementing additional safeguards to protect the ownership and value of Bootham Crescent for the benefit of York City.  These safeguards will, in effect, be part of the product of the corporate governance review undertaken by the Trust (see further notes below).

For most supporters, moving away from Bootham Crescent will be difficult to bear.  However, the Club now has time in which to properly review and consider its options.  Through a structured process, the Club should be able to move to a new stadium with superior facilities that will be of long term benefit for the Club, the community and sport in the city.

Planning matters

It will be of benefit to the Football Club to attach its name to Persimmons planning application for the Bootham Crescent site, on the basis that a Section 106 agreement is put in place, whereby development of the Bootham Crescent site is prevented until a new stadium is in place.  As noted above, ownership of Bootham Crescent will be under the control of the Trust and the Club anyway and the Trust continues to hold the principle that there should be no move from Bootham Crescent until a better alternative is in place.  In due course, the Trust will seek to provide further information to supporters about the planning process.

As a reminder to anyone who missed it, in February 2004, the Club withdrew the planning application for the redevelopment of Huntington Stadium.  Huntington Stadium has played an important role in the situation, as for many months it did remain the only option for survival and allowed the Club to maintain its Football League share.  A huge amount of time and effort was necessarily invested in the process, in particular by Ian McAndrew (Stadium Development Director).

In return for the cancellation of their agreement with BCH, Persimmon Homes will enter into an agreement with the Club whereby, when the Club comes to sell Bootham Crescent, Persimmon will have the option to purchase the site at a discount of 10% of its market value.

Quick reminder of how the ground situation arose

In 1999 the ownership of Bootham Crescent was stripped from the old football club (YCAF&AC) and placed in the hands of a new holding company, Bootham Crescent Holdings plc, whose directors happened to also be the directors of the club at the time.  Subsequently, BCH sold the football club for 1 to J.Batchelor and entered into a multi-million pound deal with Persimmon Homes for housing to be built on the Bootham Crescent site.  In addition, BCH, Persimmon and Batchelor put in place agreements to cancel the Clubs 25 year lease and replace it with one that ended on 30 June 2003, whilst at the same time Batchelor/his Racing Team received 400,000.

Since 1999, the old football clubs directors had committed to costs far beyond its means such that, by December 2002, the club had accumulated debts of around 1 million that, without corrective action, were forecast to climb by up to a further 3/4 million by June 2003.  As the club was plunged into Administration, the threat of liquidation was a very real prospect.  Some people said the club was beyond salvation.

Following completion of the Trusts Rescue Package in March 2003, the new York City Football Club Limited entered into an agreement with BCH to use Bootham Crescent, but BCH would only allow that until the end of the 2003/04 season.  Against the wishes of City supporters, the Club was been forced to look to move to a redeveloped Huntington Stadium.  York City faced the threat of being ousted from Bootham Crescent before a suitable alternative was in place, which, in turn, threatened the sheer survival of the York City business.  If the solution that has now been announced had not been brokered, Saturday 1 May 2004 could have been the last ever York City match at Bootham Crescent.

Supporters have been dismayed and angered by the actions of the former directors of the club.  However, this is now history.  The focus should be on the future for York City.  The proposed transaction will provide the Club with the stability of its own home.  The Club now has the opportunity to move forward and become better and stronger.

Amounts payable to the shareholders of BCH

The directors of BCH have a personal interest in the proposed transaction in their capacity as shareholders of BCH and these interests are disclosed in the Circular.  Under the proposed transaction, York City will acquire 151,768 (75.89%) of the shares in BCH at a price of 12.10 per share (being approximately 1.8 million in total).

The Chairman of BCH (D.Craig) will receive approximately 1.2 million and the two fellow BCH directors (B.Swallow and C.Webb) will receive approximately 200,000 each.  In addition, some BCH directors loans (60,000) will be reimbursed by York City.  The three current BCH directors who will no longer hold their director positions after completion of the arrangements will retain 17,044 (8.52%) of the BCH shares.  The selling shareholders have provided York City with a tax warranty in respect of the historic tax affairs of BCH.

Under the proposed transaction, Persimmon Homes, who had originally paid around 450,000 to acquire 10% of BCH in April 2002, will receive 242,000 for its 20,000 shares.  It is proposed that a further sum of 183,000 will be paid to Persimmon Homes in consideration of them agreeing to release their conditional contract over Bootham Crescent and entering into a new option agreement with York City.

The other minority shareholders comprise John Quickfall (holding 19,282; 9.64%) and approximately 150 other shareholders who are mostly City supporters (with an aggregate holding between them of 11,906; 5.95%).  As noted above, the Club does not have sufficient funds to acquire these shares immediately, but has indicated that it intends to do so over time, as it is commercially practicable to do so.  After re-registration of BCH as a private company the shareholders will lose the protection of the City Code on Takeovers and Mergers and if the proposed transaction does take place York City will not be obliged to extend the offer to the other shareholders.

Remaining shares in BCH held by the current BCH directors

For the time being, the three current directors of BCH (Messrs Craig, Swallow and Webb) will retain 17,044 (8.52%) of the BCH shares.  The Club intends to enter into an option agreement under which York City will be able to compulsorily acquire the remaining shares at a pre-determined price (of 12.10 per share, rising by inflation after three years) at any time over the next ten years.  York City would be required to acquire these remaining shares from Messrs Craig, Swallow and Webb upon the expiry of the ten year period or upon the earlier occurrence of certain specified default events (including York City suffering insolvency or a sale of Bootham Crescent).

For the avoidance of doubt, Messrs Craig, Swallow and Webb will have no involvement in the ownership and operations of York City.  In addition, after completion of the arrangements, Messrs Craig, Swallow and Webb will no longer be directors of BCH.

City of York Council

To arrive at the solution that has been announced, Council representatives have played a crucial role and have provided firm commitments.  Going forward, the Club will be working closely with the Council in relation to the new stadium development and in relation to the delivery of the Community Vision.  Working together, benefits can be delivered for York City, the Council and the Community.

Corporate Governance review

For the avoidance of doubt, the arrangements in relation to Bootham Crescent do not involve any change to the ownership of York City Football Club Limited.  The Trust continues to own 85% of the Club.  The balance of 15% remains owned by Jason McGill, who holds B shares, whose rights are restricted in certain respects.  In turn, the Club will hold a majority stake in BCH.  Therefore, ownership of Bootham Crescent will be under the control of the Trust and the Football Club.  When Bootham Crescent is sold, the monies that are realised, over and above any amounts owed, will all be used for the benefit of York City.  None of the Club directors can or will benefit financially from the sale of Bootham Crescent.

As reported previously, during the first quarter of 2004, the Trust Board initiated a review of the corporate governance structures and processes at York City.  This review has been called Project Spirit.  This is a natural periodic assessment one year on from the formation of the new York City.  In some respects, the corporate governance review relates to the Bootham Crescent arrangements, whereby the Trust will have control over the future ownership of Bootham Crescent.

The whole review is more wide-ranging than just issues relating to the ground.  It also includes the make-up of the boards of the Trust and the Club, the roles and responsibilities of board members of the Trust and the Club and the decision making framework in relation to Club matters.  Further details of Project Spirit will be announced by the Trust in due course.

Conference football at Bootham Crescent

Fortunately, most supporters understand and appreciate the immense challenges that have faced our Football Club over the past 18 months and what has been achieved in that short time.  Despite the issues faced and the original expectations of a Division Three struggle, clearly, it was hugely disappointing that the results on the pitch were not good enough and the Club suffered relegation to the Conference.

Saturday 1 May 2004 was to have been the last professional football match at Bootham Crescent.  Due to the actions of others, the Club was then supposed to vacate the site to move elsewhere.  However, as some supporters have commented about next season,Rather we be playing in the Conference at Bootham Crescent than be playing in the Football League at Huntington Stadium.

Unfortunately, for those who only look at the League tables, they will not appreciate the achievements of Citys supporters over the past 18 months.  For the long term future of Your Club, the most important issues to be sorted were to achieve financial survival and a ground solution.  On-the-pitch, it was expected to be a struggle, but there was hope that the players would battle for survival.  Disappointingly, that was not achieved.  After everything that Citys supporters have faced over the past couple of years, many people will be feeling that it is not fair.

Next season it will be Conference Football at Bootham Crescent.  In itself, relegation brings new financial challenges, added to which will be the ongoing costs associated with Bootham Crescent.  Next season, on-the-pitch, we should be aiming high and be confident about competing well, but without being arrogant.

Keep the Faith

With the Club and Bootham Crescent in the hands of the supporters.with unity, hard work and commitment, we can build a better York City.

For more information about Bootham Crescent matters and about the work and role of the Supporters Trust, please contact any Trust Board member or visit www.ycst.org.uk


Thank you for your continuing support.

 
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