The People vs Bill Kenwright and his Board

By Colin Fitzpatrick   ::  13/07/2011

Last week, like many, I ignored the insidious drivel that masqueraded as an original piece in the local press; the journalist in question was rightly taken to task by what I interpret as Evertonians holding the general consensus against this all-too-predictable propaganda. It got me thinking, with regard to what?s happening in the Everton Boardroom ? just what exactly is the consensus? Is it, as I believe, the majority have had enough? Or am I wrong and in a very small minority, whilst the majority are happy with the performance of the present custodians?

Let?s have none of this Cleggesque ?the truth is somewhere in between? or ?be careful what you wish for?; the facts, in my opinion, are undeniable and bring me to the inevitable conclusion that, whilst Liverpool-supporting chairman Peter Johnson may well have been a nightmare, Evertonian Bill Kenwright and his entourage, having emasculated our great club over their tenure, are undeniably worse and, as a matter of urgency, need to vacate the Boardroom at the earliest convenient moment.

Here are a few indisputable facts regarding the Kenwright years; you decide, for the good of Everton, if the Board should be replaced with an interim one charged with selling the club.

Few would want to defend Johnson ? he was undoubtedly a liability, yet he put money into the club by organising a £15m rights issue and developed the club commercially through building and opening the megastore and developing the lounges. Nobody is denying that the team on the pitch, and the club off it, were in dire straits on his watch; yet when he sold his 68% shareholding for £20M, Everton had a turnover of £28M, a positive balance sheet of £18M and total debt of £20M. The 2010 accounts reveal turnover of £79M, a £30M negative balance sheet and total debt of £85M ? in other words, no assets and debt greater than turnover; and we were apparently in dire straits under Johnson???

It?s a fact that none of the current Board has invested a single penny into the club beyond their initial personal investment of buying shares from the previous owner. I?m all for entrepreneurialism in any business but this form of share ownership in football clubs is nothing short of parasitic capitalism at its worst. Suggestions that current Everton directors have mortgaged homes, funded player acquisitions or anything else are delusional; they?ve done absolutely nothing. Bill Kenwright didn?t even have all of his £7M share of the £20M stake; he had to borrow it from the wife of fellow director Paul Gregg.

The largest investors in the club are the same people they?ve always been: the fans. Last year they invested £20M of their hard earned money, an investment they have repeated year after year and equal, every year, in contrast to the one-off personal investment made by the former members of True Blue Holdings.

Despite huge increases in TV revenue, Everton have reported financial loss after loss under Kenwright?s custodianship; additional funding has been sought through the disposal of tangible [property] and intangible [players] assets. All tangible assets are now exhausted, the last, Bellefield, raised £8M which went straight to the bank to reduce the overdraft and clear two of the sixteen outstanding mortgage charges.

Whilst all Premier League clubs have witnessed a phenomenal increase in turnover during the Kenwright years, as a direct result of massive increases in broadcasting revenues, Everton has demonstrated very little additional commercial growth, that is growth directly attributed to the actions of the Board and management team as opposed to simply benefiting from the collective Premier League negotiations with Sky, BBC and other broadcasters.

At Everton, broadcasting revenue has increased by 400%, over the past decade, yet, in the same period, commercial income, the club?s responsibility, has increased by just 30%. A decade ago commercial income represented 21% of total income; today it represents just 11% ?  we?ve not only stagnated, we?re actually going backwards off the pitch and it?s only a matter of time before we follow this on the pitch.

To help develop this commercial income stream, almost all Premier League clubs have seen some form of investment in their infrastructure; sadly, Everton have seen none. There have been attempts of course: the Kings Dock stadium, the Kirkby Stadium and, the latest, a commercial development behind the Park End stand at Goodison.

The Kings Dock represented a truly world class solution to Everton?s stadium problem. The proposed £250M, multi-purpose, 55,000-capacity stadium featured a sliding pitch and roof which thereby offered the opportunity to hold lucrative non-football events throughout the year in the heart of the city centre. In short, the proposal was essentially a Joint Venture between Everton [49%], Liverpool City Council [13%], English Partnerships [25%] and The North West Development Agency (NWDA) [13%]. Everton were required to deliver a contribution of just £30M ? which would have seen them keep all matchday revenue and 49% of any net profit from the non-matchday activities.

Through their inability to deliver their contribution, at the required date, Everton caused delays to the project which in turn increased the costs and ultimately led to its cancellation. The city council placed the failure to proceed firmly at Everton?s door, the Board having misled everybody concerned by claiming their £30M contribution was in place ? they claimed it was "ringfenced" when in fact it wasn?t. The site, since developed by Bovis, houses a successful arena and conference complex operated by the previously mentioned group in their various guises, new and old ? less Everton, of course. The site will soon be expanded to include a new exhibition hall.

Following this fiasco, former director Paul Gregg, who at least offered the club a solution that provided the £30M but required control, decided to sell his shares. They were eventually taken by Robert Earl but paid for by Sir Philip Green and deposited in the ownership of BCR Sports, an offshore company registered in the British Virgin Islands. At this time, the Greggs ended their association with Everton; presumably Bill Kenwright found a source to repay Anita in full. He?s since claimed on many occasions that he?s not a wealthy man but takes expert advice from one...

If the Kings Dock represented a golden opportunity, the next attempt at a stadium solution, for me, represents possibly the darkest hour in Everton?s history, when the chairman ? a supposed blue, one of our own ? stood by whilst the club was sold down the river for the sake of a grubby property deal that favoured a supermarket and retail park development over the interests of Everton Football Club.

What was on offer appeared too good to be true and, as it transpired, that?s exactly what it was. The club informed Evertonians that it was the deal of the century, that it was effectively free, that the developer was contributing £52M towards the cost, that the stadium would generate £10M per annum for the manager?s transfer budget ? all lies, all exposed as lies and admitted in a government inquiry at which Everton were heavily criticised for not providing any tangible supporting evidence.

The reason for this non-disclosure is that they?d have had to tell the truth, and the truth is Bill Kenwright?s Board allowed Everton to be used as an excuse to build a retail development that contravened planning regulations... in return for what? A cheap stadium, that they couldn?t fund, that wasn?t fit for the purpose and offered nothing save a solution to their decimated balance sheet. It?s remarkable that some Everton fans still can?t understand that there never was any £52M cross-subsidy from Tesco 1 they trusted the Board to tell them the truth and they didn?t.

Unforgiveable in my book ? they sold the club down the river but were found out. Bill Kenwright thinks he got away with wasting millions of pounds on a ridiculous scam which has put the club back years... yet he hasn?t; the truth will always out. Avoiding probing questions by hiding behind hollow claims of shareholder and fan engagement through highly selective meetings won?t wash; they?ve been caught out, it?s not their choice ? it?s a UEFA licensing requirement.

The latest attempt to deliver an increase in commercial revenue is a building on the Park End car park, the so called Everton Place development. Suspicions were immediately raised when it was heralded, at last seasons Shareholders Forum, as being ?self-funding? ? another version of ?effectively free?? Construction was planned to commence after the December West Brom game and completed in time for the following season.

KEIOC had learnt from the council that the development was in trouble in January and in March they broke the story on their site. This required a response from the club, but they had a problem, they had banned the Echo for daring to question the regime at Goodison. On lifting the ban, the club issued a statement that proved they?d learnt nothing from the lies told over Kirkby; they claimed the delay was due to issues moving IT equipment and relocating offices during the season, that the timeline being followed was the one agreed all along and that all the partners were happy!

News to the CEO ? at least he had the decency, bizarrely in the same article, to hint that the real problem surrounded mortgage charges on the land now held by lenders. Today, anyone passing Goodison will see further evidence of the ineffectiveness of the Board, Dixie?s statue gone, there?s a large hole in the wall and shabby looking cladding mirroring the shabby Board and, of course, there?s still no sign of the development from a Board that promises much but delivers nothing.

I could go on but we all know about the embarrassing episodes surrounding NTL, FSF, the treatment of shareholders, transfer fiascos aplenty and their inability to support the manager. Some claim that the appointment of David Moyes was inspirational, that it has improved the standing of the club; I?d say that the improvement in the team?s position is despite the actions of the Board and not because of them.

During the Kirkby inquiry, I publicly asked the CEO if their business plan was sustainable and if its failure lead to an inability to provide funds to the manager? With his usual honesty, he agreed it was unsustainable but that they had an expert team in place which wouldn?t allow the latter to happen... Well, it has happened; I?m not certain what David Moyes?s feelings are at the moment but I despair every time I switch on Sky Sports News hoping but failing to see a positive news story about Everton.

Last week, I was fortunate enough to meet the guys who?ve formed ?The People?s Group?. Intelligent, articulate and tenacious, they have a plan to get the real story of what?s been going on at Goodison across to the media. The media has been reluctant up to now as it?s a complicated story ? not one that can be easily explained as Big Bad Yanks loading a club with debt ? but these guys are committed and I?d implore all Evertonians to support them.

I?ll reiterate again, the people on Board of Everton FC are ineffective, insincere and simply can?t be trusted with the future of our club. Are all the aforementioned problems the responsibility of the Board? In my opinion, Yes; some directly, others due to the amateurs they happily continue to employ. All the other shareholders, the fans and the manager simply deserve better.

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