Often Partisan

Gambling for Big Stakes

It’s been a bit of a strange week, even by Blues’ recent standards. Three players signed on the Wednesday followed by an announcement yesterday that Blues now have a transfer embargo placed upon them. This season has been run by deadlines and it appears Blues gave themselves just a fortnight (between the 17th, when they could loan players until the playoff final and last night) to complete their loan business. No wonder they signed Cian Hughton.

As has been said elsewhere, the transfer embargo on Blues is a bit meaningless now anyway. Blues have done their business, and were unlikely to add any players in the remaining three weeks of the window. The problem that Blues face is the transfer embargo is now in place until the accounts for BCFC (and it’s parent group, BIH, should the league require them also) are in place. Now, if the accounts are filed as has been publicly announced, ie by the end of April, then again, no biggie – transfer embargo lifted in time for the close season. The problem gets much bigger if that date comes and another announcement of delay is made.

In a piece I wrote for the Birmingham Mail in January, I said that I thought Blues were at a crossroads. Now we’re into March, I think we’ve gone past that and we’re now past the point of no return. My personal thoughts are that promotion is very much do or die for Carson and BIH – go up and the prospect of Premier League money should mean Blues can climb back onto the straight and narrow; failure however could be curtains for Carson.

It’s well documented how much promotion to the top flight can mean in monetary terms for a Championship club – the last season Blues were in the top flight, they received just shy of £40million from the Premier League. Compare that to the £16million they will receive in parachute payments this season and you can see how much of a difference it’ll make without taking additional ticketing, commercial and advertising revenue into account. Thus promotion could well be the saviour of the club; whilst I doubt Blues would spend much on transfer fees the day-to-day running of the club would probably be easier.

What worries me is if we don’t go up. With no truckload of cash from Sky and Carson’s wallet being metaphorically zipped up by the HK judiciary, is the club on enough of an even keel to keep itself going? Or would we see another sale of what assets we have left and a further slide into the mire? I desperately want to believe that enough was done this season to ensure that the club is more or less at a point where it can break even and continue without having to strip itself further but I’m not convinced.

There has been no indication either that Carson has thought about selling the club. It seems like he’s clinging on for dear life as the rest of his life falls to bits around him, holding on to the one thing he has left that potentially offers him any prestige or power. He reminds me of a poker player on a losing streak – he’s got just a few chips left on the table and he’s got to make the decision to be brave and throw the lot in and potentially risk losing his shirt; or the braver decision to pick them up and walk away, knowing he’s got a stake for another day to try when his luck might be better and the opposition aren’t so big and scary.

Carson is supposed to have made his money investing in the gaming casinos of Macau. Right now, I think he’s making the biggest gamble of his life – win, and he’s got a chance of being the high roller again. Lose, and he’s just another failure sitting in the lobby, dreaming of what might have been.

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14 Responses to “Gambling for Big Stakes”

  • Scoobers says:

    You would hope if we were not promoted that next seasons parachute payment would help us to achieve our goal then.

    The club does seem to be just surviving at present on a day by day basis.

    Of course if Carson wants to cling on will most/ all of next seasons parachute payment be swallowed up by the holding company … ?

  • Blue Steve says:

    It may yet turn round for Carson. If we are promoted and he is found not guilty in November he could potentially invest some money in next years Jan transfer window. This I think is the best case scenario for Carson and a scenario that has a chance of happening. Waiting for a white knight is a little bit like burying your head in the sand. There are many ifs and buts in this equation for now I Hope we beat Derby this afternoon. KRO…

  • DoctorD says:

    The reality for me is no promotion, ongoing confusion over accounts, and stumbling to mid-table n the Championship next year. Anything better than that will be a fabulous bonus, but I am not expecting it. Hope for the best but prepare for the worst is my mantra.

  • GoodyBlueShoes says:

    A well balanced piece of editorial once again Ed. Once again a very good read.

    My thoughts for what they are worth and it pains me to type these words. Regardless of what happens in Hong Kong because it will not happen quickly; if we do not find a buyer within the next 12 weeks HSBC will have to take some manner of action in order to get at least some it’s cash back.

    Best

    Goody

  • Bluenosesol says:

    According to a major accounting firm, 80% of the Chamionship spend more than 100% of their income on players Wages. 95% of these clubs so not receive parachute payments. Birmingham city appear to have excellent coporate support and amongst the most expensive season tickets in the league. If this is the case, why is it a certainty that Blues are in the financial mire or at least any more so than the average Championship team? Surely as Alan Sugar, Alex Ferguson, John Majedski and many others have stated, the perverse escalation of players wages is the root of all the financial woes in European football. That said, incompetent financial management and governance doesnt help!

  • Euston 9.18 says:

    Last paragraph of the E’Mail,report.

    “In the meantime Blues are continuing to operate as a going concern and recently settled a tax bill that was due”.
    Seem to paying the bills at least.

    K`R`O.

  • andy says:

    Football in general has been ruined by money, sky being the biggest culprit along with greedy over paid agents and players. Supporters have to take some blame with their demands of instant success and insisting chairman put more money, the clubs simply have not got,in. English football is in a sorry state, ruined by greed and owners with bottomless pits of money at clubs like Manchester City.

  • Atahualpa is a BlueNose says:

    Great, Almajir has made another accurate and envisaged report regarding BCFC / BIH / CY.

    CY is more than likely having a wee dram in the last – chance saloon, and will do or die depending on where BCFC are come the end of the season.

    Obviously the board, PP are aware of some of what is going on – hence the signings, and the lines of credit have dried up for BIH. It would seem as if CY can’t be very sure of his associates making loans, no matter what preferential rates are promised, and it all comes down to BCFC saving the day by being promoted.

    Do not believe he will sell cheaply, as it is the only thing in his portfolio which has a fair amount of kudos and prestige attached; especially once we are back in the EPL. Also, he just would not want to make a big loss on his investment. When he bought the club, going on what was said, BCFC were going to be used as a vehicle to attract investment and publicity to BIH. Has not transpired, YET.

    Is there a possibility that even with CY not being around, BCFC would be self – sustaining if we were promoted?? Stands to reason that the club would be aware of the circumstances around what has transpired, and would run it according to its means – even if it meant yo – yoing.

    Ideal solution is that Blues are promoted, CY is found Not Guilty, and we all live happily ever after. Is that unrealistic and living in a day – dreaming world?? Quite possibly, but did we all not once dream once of winning a Cup at Wembley and following our club in Europe??

  • Dave says:

    Superb post as ever with a philosophical view of the club’s finances.

    The transfer embargo doesn’t bother me too much, and you have to give credit to to CH and the board for getting some players in, because they must have known it was coming.

    Can’t see Carson selling – he’ll want to at least break even with his investment, and his personality suggests that he won’t want to back down and admit defeat, albeit temporarily.

    It does appear promotion really is vital and with the tough league schedule ahead (complicated more if we beat Chelsea on Tuesday) it’s a real worry.

  • Dirty Bertie says:

    Absolutely right Almajir, CY’s playing Texas Hold ‘Em. He’s all-in and waiting on the river card with 1 out (promotion). Odds? 45:1 against!!!
    Oh well, would anyone like a haircut?

    The next Football League deadline is 31.3.12 (see rule 16) when they’ll require projected accounts to ensure the club can meet its obligations next season. Seems they’ll miss this so will either have a budget imposed or the registration embargo will continue, or both.

  • Aussiebrum says:

    It’s more complex than this for two reasons:

    1. Yeung owns under 25% of the parent company capital so the actions and wishes of his fellow shareholders greatly outweigh his own

    2. We have preference share holders, they have priority and the convertible nature of the shares give the holders a powerful stake

    And the conventional wisdom that a Premiership place will solve a clubs financial woes are fanciful. Accompanying promotion is a great deal of added expense, contractually player payments increase as do ancillary costs.

    It’s no more likely a white knight will buy a Premiership BCFC than a Championship BCFC. Even if they do, the premium for a Premiership Club probably won’t be substantial if anything.

    With tightening credit markets and some sensible business practices starting to creep into football administration or at least the silly times passing, the only question now is just how much will Yeung and friends lose on their BCFC investment. Or, will the other shareholders wise up, replace Carson then pursue the China strategy?

    • almajir says:

      I must disagree with your statement.

      Whilst player wages will in no doubt rise with promotion, it’s entirely possible that they won’t rise in proportion to the money brought in by going up; particularly if a club are careful with contracts. Consider Blackpool; on promotion to the top flight they stuck firmly to their guns and refused to break a wage ceiling of something low like 10-15k per week and to pay agents fees. Thus the year they were in the top flight they actually made a fair profit, meaning when they came back down they didn’t have to dump a load of players on high wages. Blues problems came about because they went for it and paid quite a few players unsustainable wages – if we were to be promoted this year I doubt we’d do that again.

      As for other shareholders wising up and forcing Carson out – they’ve had plenty of opportunity. The problem is Carson is the figurehead and the driving force – no one else is prepared to take that mantle.

  • […] to do that – however, as I’ve stated on here before I think Carson is drinking in the last chance saloon. If Blues don’t go up, I’m fairly sure that they would manage to survive a bit longer […]


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