Football in crisis: the club owners

A three-part series looking at the national game from the perspectives of owners, fans and players. In the first-part, Roger Blitz examines why business people buy into such unprofitable ventures as football clubs.

● High-risk game of two halves

Football owners – case studies

Eddie Davies, Bolton Wanderers

Brought up outside Bolton, Eddie Davies played for Bolton Boys Federation in goal, and on Saturdays alternated between watching Bolton Wanderers and Bury. His company, Strix, which became world leader in the production of control systems for kettles, was sold to private equity in 2005 for £300m.

Through connections, he got to know the Bolton board. In the mid-1990s, Bolton was financing a new stadium, Mr Davies told a board director the plan wouldn’t work. “I just said, ‘total rubbish, here’s my card, when you get in trouble, give me a ring’.” The phone rang 18 months later.

Mr Davies was part of a coup, taking full control in 2003. The club, he says, has never quite dealt with spiralling stadium costs and relied on the investment of Mr Davies, having abandoned a working relationship with bank lenders. “The interest [on his loans] is never paid, it’s rolled,” he says.

Bolton has enjoyed 10 consecutive years in the Premier League, the task he and the board initially set themselves. Mr Davies, 64, sees himself as custodian of the club and, while not actively seeking a buyer, would be content with an offer that covered his outlay. “I’ve had enjoyment out of it. I mean, wouldn’t it be great if you made a huge profit?”

Mary Gibbons, Stockport County

A childhood fan, Mary Gibbons and her husband have made “a decent living” out of domestic appliance retailing, diversifying into fitted kitchens and bathrooms. “I wish I was stinking rich,” she says. “If I had more money I would definitely put it in to help the football club.”

They were part of a consortium that in April completed a £375,000 deal to take the club, which had accumulated debts of £6m, out of administration. “We inherited a few other debts, but we are debt-free. We couldn’t open a bank account. I was paying for quite a bit out of my own pocket.”

The club’s biggest gate so far this season is 4,500. It employs 90 people, of which 25 are players. Revenues are £2m, with a footballing budget of £800,000. Ms Gibbons says she is “here for the long haul”. She believes running a club is no different from other businesses. “You do have to be very stringent with figures and watch every penny. And you need these people through the doors to make ends meet.”

Ms Gibbons expects the 2010-11 season to leave Stockport County, which rents its ground and is still operating with a squad inherited from administrators, with a small loss. All things considered, she believes that represents no small achievement.

Pete Winkelman, MK Dons

A club with no heritage will find it harder in difficult times to keep attendances up, says former record producer Pete Winkelman. MK Dons was created from the relocation of Wimbledon FC to Milton Keynes in 2002. Mr Winkelman was part of the consortium that brought the club out of administration.

A new stadium was completed in 2007 and, by the time its capacity reaches 32,000, will have cost nearly £70m. “We’ve been able to build these costs into our plans,” says Mr Winkelman. “What’s much more difficult to manage is what’s happening on the pitch.”

The club, with debts of £20m, has introduced innovative pricing and can point to a strong following among under-16s, who make up more than a third of season-ticket holders. Mr Winkelman estimates football has created 3,000 jobs in Milton Keynes and brought up to £200m in inward investment. What the club could do with is “momentum” on the pitch.

“Too often we run our player budgets a little bit too high,” says Mr Winkelman. “There is always that inkling to push things further than you would like to.