Worrying times at our rivals Kidderminster.
As usual with the carpet men it seems that lack of cash is the problem. At the end of August the club issued a distress call for potential investors to get involved.
“New funds will be needed in 2014/15 if the playing squad assembled is to remain together for the remainder of the current season.
The directors have known for some time of the financial challenge and are committed to continue taking whatever decisive actions are necessary to make the financial adjustments needed.”
A couple of days after issuing this warning the Finance Director quit the troubled club.
How did it get to this ?
Last season’s budget was around 700k , which is rather bigger than ours and on much lower gates.
They enjoyed the benefits of selling a player (Lolley to Huddersfield) and a good cup run last season and this allowed them to squeak through without too much pain. This largesse was offset by having to pay off two departing managers, Burr and Thorn.
However the resignation of several directors (Ernie and Kath Lane) during the summer has left the club short of funds and the Trust (KHIST) had to step in during the summer with a £21k investment in order to pay the wages.
It seems probable that the resigning Directors were irked by the excessive budgets set last season and had decided that they were not going to subsidise it. The club has responded by threatening court action against their former directors in a bid to recover the cash that they claim they were owed.
Whether they have a case or not remains to be seen but football clubs and the legal system are seldom happy bedfellows and it may well end in tears.
The Trust are major shareholders in the club and have been less than impressed with the actions of the board.
We would have expected more effective stewardship of the proceeds received during the club’s period of financial good fortune during the last 18 months.
The club were hoping for a very optimistic 4000 gate against Gateshead last weekend but in the end had to settle for 2600 paying a reduced price. The team are playing well and are one of the early front runners this season. However, like so many others, it is a team that they cannot afford and it is baffling how they could have got themselves in this situation just a few years after the last crisis.
A glance at the leading Harriers website reveals worried fans discussing the situation in terms of Directors loans , Directors shortcomings and the possibility of fundraising or donations bridging the gap.
We cant see anybody suggesting that the club needs to reduce its outgoings to match its income.
The following opinion seems to sum it up.
1. The Lanes pay what they owe
2. New investment is found
3. Shareholders pay in money to protect their investment – it is an investment although one very unlikely to ever be realised
4. The Shareholders relinquish their shares and allow the club to be taken over by someone willing to put money in.
If one of the above does not occur then simply we will go in to administration lose points and anyone will take us over. Lets us hope for better news soon as losing Joe Hancox ( ex finance director) is not what the club needs at this point in time.
Cost cutting and balancing the books does not seem to be on anyones radar.
Of course by running the club in this reckless manner they are cheating the other clubs in the Conference, not least ourselves. They are not only spending money that they do not have but their over spending has an inflationary affect on player wage demands. We are all victims here.
Our view on Kiddy is that they are a small club that represents a small town and will always struggle to generate enough money to be able to compete for promotion and life after promotion. At the moment it looks like they are trying to do a mini Fleetwood but without a minted sugar daddy.
The pies there are really nice as well.
From a distance the answer seems to be straightforward.
The trust is one of the major shareholders. They should try and build a group of shareholders to oust the current board and return the club to an acceptable level of spending.
It would need a lot of education for their fans to recognise that this is the way forward and, in fact, the only way that the club can be run on a sustainable basis.
Or they could go ahead and win the Conference and take their financial problems with them.
We will come back to the Kiddy story later in the season.
Edit – Since typing this the club have announced that the legal action is on hold after the Lanes paid a “five figure sum” to make up the latest wages shortfall.[I]