Why administration is unlikely but the exit of Swindon’s backer Andrew Black is certain

Ron Smith and Alex Cooke explain how a £13 million debt and Andrew Black’s search for new investment isn’t news but remains essential for the future of the League One side.

If you are looking for the perfect summary of yesterday’s needless panic about Swindon Town’s financial position, it is here, courtesy of former chairman, Jeremy Wray.

“The club doesn’t owe a penny, doesn’t have an overdraft, doesn’t owe the taxman – any debt is only to its shareholders and to its owners and as a result everything that’s out in the open now is what’s been known for a long time. That is that Andrew Black is looking for a change in ownership of the club.”

There is certainly comfort to be found on those words, especially when combined with comments from Town’s current chairman, Sir William Patey, about four groups of investors currently showing an interest in the club.

Such comfort couldn’t be found on Thursday morning however, when one provincial journalist found a way to earn the maximum national coverage from a local football story – lunging for a scary word which attracts Internet traffic, trolls, tweets and comments. That word was obviously administration. In using it Chris Wise of BBC Wiltshire hid behind a much smaller word, could. Using could free him to spread despair and a grim hypothesis with little to support it. After all in life anything could happen, and we can’t rule it all out – bar the quest for hits/listeners/kudos in certain parts of the media.

For Sale

However, if short-term panic wasn’t required that isn’t to say that Paolo Di Canio can expect to keep adding to his already swollen squad – especially with Watkins revealing that the club is 15% ahead of its budgeted revenues across all areas in first six months.

After all, Swindon Town FC’s finances have always hung in the balance. The club has been run hand-to-mouth before and following the Andrew Fitton led takeover. While the CVA and potential liabilities of Bill Power and Shaw Park Developments are now long gone, much to the credit of Fitton, the club was never ‘debt free’ as had been assumed by many supporters and reliant to this day and beyond on the support of the majority shareholders, now falling to one man, Andrew Black – with a 98% stake. A man who has been pursuing every route to deliver an exit strategy, now apparently even more so after the ‘A word’ was inappropriately put into the mouth of Sir William Patey by BBC Wiltshire’s Chris Wise.

Many, including Paolo Di Canio, have questioned the apparent lack of ambition shown by Andrew Black to fire Town to the Championship since news of the transfer embargo broke last autumn. The reasons for Black’s reluctance to write a blank cheque have been there for everyone to see for some time now.

Andrew Black’s search to find a wiling new owner for STFC began around one year ago. At the time we were made aware of significant interest from an unnamed property developer to become the majority shareholder – an obvious exit strategy for Black as such experience could have delivered the County Ground redevelopment. Those talks continued over several months, culminating to the AGM being delayed from May until July, by which time the club remained in Black’s control and the club no nearer to finding a financial savior.

While this search for a new investor continued, eventually leading to Jeremy Wray replacement with SWP – who has a specific brief on appointment to find a ‘new investor’ – the obvious tensions behind the scenes raised real question marks over the support given to Paolo Di Canio’s spending strategy and what the owner has been wiling to underwrite.

With Andrew Black no nearer to finding that elusive investor it would never be in his interests to over-spend yet again to fund Town’s potential promotion in 2012/13, which would be before the previously agreed three-year gestation period for the ‘grand promotion plan’. While we await the publication of the 2012 accounts, those covering 2011 painted a troubled picture and a £1.3m loss – even greater if player sales hadn’t grossed £1.6m. Given Di Canio was heavily backed to return Town to the third tier, leading many to accuse Town on ‘spending their way out of League Two’, we can reasonably expect further operating losses in 2012, with Black left footing the bill.

After Black had already stumped up significant equity investments totaling £2.5m over the past six months alone – including to cover expected losses for 2012 – an early promotion to the Championship has tested his commitment, which has been tough for a confessed non-football fan. Without a new rich friend with a few spare quid on the board, or a new majority shareholder, Andrew Black would be required to plunge deeper into his pockets to find significantly greater sums to protect his investment from an immediate relegation. In truth, Black, who had seemingly lost interest over a year ago, was in a no-win situation.

It just remains to be seen who now wants to buy a club that doesn’t owe a penny, doesn’t have an overdraft, doesn’t owe the taxman and doesn’t actually need to enter administration – but owes a huge debt to one man, who is now looking for a £13 million exit.


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