Recent news that Darlington has entered administration – and strong rumours that other clubs in Leagues 1 and 2 may be following them before the season's out – has prompted Bees fans to ask about the immediate likelihood of Brentford Football Club suffering the same fate.
Darlington is yet another example of football in the lower divisions not being financially viable. Make no mistake, times are tough for all football clubs outside of the Premiership. As David Merritt, Bees United Chairman and Club Director, comments: “At Brentford we have suffered a credit crunch triple-whammy: sponsorship is more difficult to come by, increasing the Club losses; we are finding it more difficult than ever to identify investors willing to lend to support those losses; and even our existing investors are suffering, and are more likely than ever to want their money back when their loans become due.”
Nevertheless, the short answer to questions about the Club's immediate prospects was given by Club Chairman Greg Dyke at the recent annual general meeting of the football club. He said that he had confidence the Club should be able to “see out this season and the next”.
This is not to say, though, that the Club's finances are looking any better. As Bees United has made clear, they have never looked worse. The Club will lose £0.5 million this season, after which the mountain of debt will have reached about £9.5 million.
Since December 2007 when David Heath took over as Acting CEO and Alan Bird became the Club's Finance Director, the Club's day-to-day expenses have been reined in and strenuous attempts have been made both to set realistic budgets and, more importantly, to keep to them.
What has become apparent, however, is that Brentford Football Club in its present form cannot be run at break-even in League 2 without jeopardising the Club's football league status. And even if this were possible, the Club's debt mountain would remain, looming over the whole enterprise.
David Merritt highlights the problem: “Unfortunately break-even is extremely difficult to achieve when nearly all of our competitors are systematically losing money. That's where the football authorities need to recognise that it is not good for football if clubs are spending money they haven't got.”
“The Football League has put a lot of effort into the process for clubs when administration occurs, but it has completely failed to address the problems which are causing this to happen,” he adds. “The League seems to be perfectly content for clubs to be financially irresponsible, and merely to punish them after the event.”
“Staring a season with three clubs on negative points for having gone into administration – and now for Darlington to have become the fourth club to suffer a points deduction – damages League 2's integrity and credibility.”
Given an effective CEO like David Heath – who is still doing the job voluntarily, part-time and for nothing – the Club would be able to balance its books far better in League 1. But the debt mountain would still be approaching the value of Griffin Park, which is stated as £10 million in the football club accounts.
This position is clearly not sustainable in the long-term. A new community stadium at Lionel Road remains a great opportunity to transform the Club, and Bees United expects a new stadium to have a significant and positive impact on the Club's finances.
The Lionel Road team, led by Brian Burgess, is currently mobilising the voluntary efforts of Bees supporters with the professional skills needed to review the current stadium design to see if the cost of meeting the club's requirements can be reduced.
“It's going to be a balancing act,” says Brian Burgess. “On the one hand, the cheaper the stadium, the quicker we might be able to get it funded and built. But on the other hand, there is no point in the football club moving unless the new stadium offers bigger and better facilities generating more revenue. Achieving a sustainable business plan for the club is the main objective,” he insists, “and this is what we are looking at in detail.”
Meanwhile, the boards of both the football club and Bees United are working hard on resolving the problems of sustaining the Club in the shorter term. “In the current economic climate, and with the current state of football,” comments David Merritt, “we cannot see a situation in the short-term where we can break-even financially and maintain a satisfactory degree of footballing success.”
“As long as the Club remains loss-making, refinancing of existing debt as well as arranging new financing are priorities for both boards,” he insists. “Without a dramatic influx of new money, there will be constant pressures on our cashflow.”
Bees United can confirm that both boards are currently working on short- and longer-term financial solutions to the Club's financial difficulties. “The problems facing Brentford Football Club are no different to those facing most other companies at the present time,” comments David Merritt, “but both boards have some confidence that the discussions in progress will enable Brentford Football Club to continue to operate both this season and next.”
For the moment and for obvious reasons, the exact details of those discussions remain commercially confidential. But rest assured, Bees United will communicate the outcome to supporters just as soon as it is able to do so.
Two good reasons
Bees United is working hard to make Brentford Football Club successful on the pitch and financially sustainable off of it. The Supporters' Trust relies entirely for its regular income on subscriptions, donations and standing orders. This income is used almost entirely to pay off the Club's debts.
But there are two other good reasons why you should join Bees United – and consider setting up a monthly standing order – if you haven't already done so. Firstly, your name could be pulled out the hat to watch a match from the Directors' Box, and be entertained in the Boardroom before and after the game. Secondly, as the season reaches a climax, you may have a better chance as a Bees United member of getting match tickets for all-ticket games.