Post by QPR Report on Feb 18, 2009 7:34:37 GMT
Orient are one of those clubs which surely everyone must like as a second team.
Guardian/David Conn -
Orient fans' fears mount as Hearn plans Brisbane Road swoop
Barry Hearn's proposed purchase of Leyton Orient's Brisbane Road ground has supporters fearing for the club's future
Barry Hearn, the east London snooker, darts, boxing and poker impresario, has decided that 14 years as the proud owner of Leyton Orient Football Club has now added up to more than long enough. Like many businessmen in charge of lower-division football clubs, he has consistently run a wage bill higher than the club can really afford, to pay players who can compete above the level the club's crowd (5,206 on average last season) can realistically finance.
Like many smaller club chairmen, Hearn has financed much of the club's shortfall himself by lending money to the club – via his holding company, Matchroom Sport. Those loans reached £2.4m last June, and have now increased by a further £1m because Hearn this month paid off the club's other significant debt, owed to the finance company, Lombard North Central.
Hearn has put Orient up for sale, and says three or four consortiums have inquired about it, including Terry Byrne, adviser to local-boy-made-good David Beckham, but Hearn did not feel any were quite right. It is, anyway, difficult to imagine anybody paying a price for Orient that is substantial enough to include repaying £3.4m to Matchroom.
So Hearn has now proposed a solution which also echoes scenarios played out at other lower-division clubs: ownership of the club's ground is to be transferred from the club itself to his own company, in exchange for wiping out the loans.
This has raised alarm from the Leyton Orient Fans' Trust (Loft), because such separations from their grounds in recent years have taken several clubs to the edge of ruin. Hearn, though, insists he is doing this to protect, not asset-strip, the club.
"There have been times where people have bought grounds and ripped off clubs," he acknowledged. "But they didn't do 14 years first, never taking a shilling out. This protects the club because there is no way anybody can come in and do anything detrimental with me remaining in control of the ground – and I won't, because if I was going to, I'd have done it 14 years ago.
"Anybody with a brain will say I must be straight because I've spent a long time being crooked. This is a generous deal for the club, it's a protective move, and gives the club another five years' security."
Hearn's proposal, which will be voted on by shareholders at the end of this month – Matchroom owns 79.3% of the shares so the vote is a formality – is indeed more generous than the straight ground-for-overdraft move executed at Rotherham United in 2005, or the transfer of York City's ground, Bootham Crescent, to the directors' holding company for £165,000.
Hearn has had Brisbane Road independently valued and says he has accepted the highest estimate, £6m, as the valuation. Matchroom will pay that for Orient's ground, but £3.4m of it will be deducted as the company writes off its loans to the club. So Orient will receive the rest, £2.6m, and be left debt-free, although running at a substantial loss. They will become tenants of Matchroom on a 20-year lease, paying no rent for the first five years, then £180,000 a year. If Matchroom sell the ground within the 20-year period, it would not keep all the profits, but share them 50% with the club.
Loft protests that the deal sells the club short because Hearn will keep 50% of the profit if the ground is sold; as things stand Orient own Brisbane Road on a long lease and so would keep 100% of any sale proceeds. Hearn points out that he already owns the club and its ground and argues the deal is "over-fair" to the club.
"It's a fabulous deal. I'm giving away 50% of the profit – that has never happened, not at Rotherham, York or Brighton. I have given this a great deal of thought so I'm seen to act in a fair and reasonable manner. People should understand I have been there for 14 years with no security. I am wealthy enough; I don't need to rip anyone off. But it's time at the football club to draw a line in the sand and live in the real world, not on handouts from me."
Hearn accepted that Brisbane Road's value will be "significantly more" than £6m were it sold for redevelopment – the land in the four corners of the ground was sold for £7.35m in 2003, to Bellway Homes, who built flats there. However anybody leaping to the conclusion that Hearn is positioning himself to turn a quick profit by moving Orient the mile or so to the new Olympic stadium, when it is reduced to 25,000 seats after 2012, are wrong, he claims.
Last week the Olympics minister, Tessa Jowell, released the extraordinary news that when the Olympics are over, no tenant has been found to make regular use of the stadium, which, according to the latest calculations, will cost £504m to build. A school is to move into the building's structure, and the English Institute of Sport; community events are to be held on the track, but no rugby union club, nor even struggling Leyton Orient, is prepared to move in because the athletics track will be permanent.
"I don't dislike my fans enough to make them go through [watching football like] that," scorned Hearn. He said he held talks with the London Development Agency for three years, beginning as soon as he learned that the 80,000-seat stadium will be reduced after 2012 to 25,000 seats, and so will not accommodate a Premier League club such as West Ham or Spurs.
"It was so exciting – imagine 'Olympic Stadium' as the postal address for Leyton Orient," Hearn said. "It would have solved our problems and we would have brought some money and given it some long-term viability. We could have lived with retractable seats over the track, but not with a permanent track and the way the seats are designed. The Olympics is a good thing but this centrepiece will be wasted – a white elephant requiring substantial ongoing cash from the taxpayer."
A spokesman for Jowell confirmed that with no sports club as a tenant, the stadium will require public money for its upkeep, but declined to say how much.
Hearn insists he has no immediate plans to move Orient, although he is investigating a site at Harlow. He argues Matchroom's £6m purchase of the ground protects the club from a new owner buying it purely for the property value. However Doug Harper, chairman of Loft, has opposed the proposal because it fractures Orient's security in owning their own ground. "This seriously calls into question the future of our football club," he argued.
Matchroom, in its most recent accounts, posted profits of £5.7m, and £13.2m turnover, which had increased, "mainly due to the development of new major televised poker tournaments and also the explosion in the popularity of professional darts".
Asked why he could not write off his loan to the football club and allow it to keep its ground, Hearn replied: "I don't write off money. Why should I? It's not a charity."
www.guardian.co.uk/football/blog/2009/feb/18/barry-hearn-leyton-orient-brisbane-road
Guardian/David Conn -
Orient fans' fears mount as Hearn plans Brisbane Road swoop
Barry Hearn's proposed purchase of Leyton Orient's Brisbane Road ground has supporters fearing for the club's future
Barry Hearn, the east London snooker, darts, boxing and poker impresario, has decided that 14 years as the proud owner of Leyton Orient Football Club has now added up to more than long enough. Like many businessmen in charge of lower-division football clubs, he has consistently run a wage bill higher than the club can really afford, to pay players who can compete above the level the club's crowd (5,206 on average last season) can realistically finance.
Like many smaller club chairmen, Hearn has financed much of the club's shortfall himself by lending money to the club – via his holding company, Matchroom Sport. Those loans reached £2.4m last June, and have now increased by a further £1m because Hearn this month paid off the club's other significant debt, owed to the finance company, Lombard North Central.
Hearn has put Orient up for sale, and says three or four consortiums have inquired about it, including Terry Byrne, adviser to local-boy-made-good David Beckham, but Hearn did not feel any were quite right. It is, anyway, difficult to imagine anybody paying a price for Orient that is substantial enough to include repaying £3.4m to Matchroom.
So Hearn has now proposed a solution which also echoes scenarios played out at other lower-division clubs: ownership of the club's ground is to be transferred from the club itself to his own company, in exchange for wiping out the loans.
This has raised alarm from the Leyton Orient Fans' Trust (Loft), because such separations from their grounds in recent years have taken several clubs to the edge of ruin. Hearn, though, insists he is doing this to protect, not asset-strip, the club.
"There have been times where people have bought grounds and ripped off clubs," he acknowledged. "But they didn't do 14 years first, never taking a shilling out. This protects the club because there is no way anybody can come in and do anything detrimental with me remaining in control of the ground – and I won't, because if I was going to, I'd have done it 14 years ago.
"Anybody with a brain will say I must be straight because I've spent a long time being crooked. This is a generous deal for the club, it's a protective move, and gives the club another five years' security."
Hearn's proposal, which will be voted on by shareholders at the end of this month – Matchroom owns 79.3% of the shares so the vote is a formality – is indeed more generous than the straight ground-for-overdraft move executed at Rotherham United in 2005, or the transfer of York City's ground, Bootham Crescent, to the directors' holding company for £165,000.
Hearn has had Brisbane Road independently valued and says he has accepted the highest estimate, £6m, as the valuation. Matchroom will pay that for Orient's ground, but £3.4m of it will be deducted as the company writes off its loans to the club. So Orient will receive the rest, £2.6m, and be left debt-free, although running at a substantial loss. They will become tenants of Matchroom on a 20-year lease, paying no rent for the first five years, then £180,000 a year. If Matchroom sell the ground within the 20-year period, it would not keep all the profits, but share them 50% with the club.
Loft protests that the deal sells the club short because Hearn will keep 50% of the profit if the ground is sold; as things stand Orient own Brisbane Road on a long lease and so would keep 100% of any sale proceeds. Hearn points out that he already owns the club and its ground and argues the deal is "over-fair" to the club.
"It's a fabulous deal. I'm giving away 50% of the profit – that has never happened, not at Rotherham, York or Brighton. I have given this a great deal of thought so I'm seen to act in a fair and reasonable manner. People should understand I have been there for 14 years with no security. I am wealthy enough; I don't need to rip anyone off. But it's time at the football club to draw a line in the sand and live in the real world, not on handouts from me."
Hearn accepted that Brisbane Road's value will be "significantly more" than £6m were it sold for redevelopment – the land in the four corners of the ground was sold for £7.35m in 2003, to Bellway Homes, who built flats there. However anybody leaping to the conclusion that Hearn is positioning himself to turn a quick profit by moving Orient the mile or so to the new Olympic stadium, when it is reduced to 25,000 seats after 2012, are wrong, he claims.
Last week the Olympics minister, Tessa Jowell, released the extraordinary news that when the Olympics are over, no tenant has been found to make regular use of the stadium, which, according to the latest calculations, will cost £504m to build. A school is to move into the building's structure, and the English Institute of Sport; community events are to be held on the track, but no rugby union club, nor even struggling Leyton Orient, is prepared to move in because the athletics track will be permanent.
"I don't dislike my fans enough to make them go through [watching football like] that," scorned Hearn. He said he held talks with the London Development Agency for three years, beginning as soon as he learned that the 80,000-seat stadium will be reduced after 2012 to 25,000 seats, and so will not accommodate a Premier League club such as West Ham or Spurs.
"It was so exciting – imagine 'Olympic Stadium' as the postal address for Leyton Orient," Hearn said. "It would have solved our problems and we would have brought some money and given it some long-term viability. We could have lived with retractable seats over the track, but not with a permanent track and the way the seats are designed. The Olympics is a good thing but this centrepiece will be wasted – a white elephant requiring substantial ongoing cash from the taxpayer."
A spokesman for Jowell confirmed that with no sports club as a tenant, the stadium will require public money for its upkeep, but declined to say how much.
Hearn insists he has no immediate plans to move Orient, although he is investigating a site at Harlow. He argues Matchroom's £6m purchase of the ground protects the club from a new owner buying it purely for the property value. However Doug Harper, chairman of Loft, has opposed the proposal because it fractures Orient's security in owning their own ground. "This seriously calls into question the future of our football club," he argued.
Matchroom, in its most recent accounts, posted profits of £5.7m, and £13.2m turnover, which had increased, "mainly due to the development of new major televised poker tournaments and also the explosion in the popularity of professional darts".
Asked why he could not write off his loan to the football club and allow it to keep its ground, Hearn replied: "I don't write off money. Why should I? It's not a charity."
www.guardian.co.uk/football/blog/2009/feb/18/barry-hearn-leyton-orient-brisbane-road