A few years ago now, the-then Leeds United chairman Peter Ridsdale sat before a packed press conference and coined a now-famous phrase, saying his club had “lived the dream”. Ridsdale and the Leeds board opted to speculate to accumulate, and ploughed money they didn’t have into expensive signings and high-wage earners. For a while it actually worked. Leeds became serious challengers to the established order at the top of the Premiership, and they qualified for the biggest cash cow of all, the Champions League. Ridsdale’s spending had taken Leeds from Premiership also-rans to European contenders. Some dream indeed.
Unfortunately that dream turned into a nightmare for Leeds, as they found themselves unable to sustain Champions League football at Elland Road, despite coming within an ace of the final. They failed to re-qualify, and with debts spiralling out of control, costs were cut as Leeds started to free-fall down, and ultimately out of, the Premiership.
Ridsdale was philosophical at the press conference, saying that it was an amazing ride, and it was great for the fans to have lived the dream. Ask a Leeds United fan whether they appreciate it now – I doubt you’ll get too many takers.
Leeds remain mired in the Championship, and after narrowly missing out on promotion through the playoffs last season, they currently find themselves struggling in the bottom half of the division after a poor start. Manager Kevin Blackwell was shown the door as a result. It may be over five years since Ridsdale and the Leeds board decided to “live the dream” and speculate with someone else’s finances, and of course, they have themselves left Elland Road, but the fall-out continues to be felt at Leeds, despite the fact that they are a big club, with a huge fanbase.
By comparison, Gillingham are one of English football’s minnows, a club that has never finished higher than the heady heights of 11th in English football’s second tier. While Leeds can pull in huge crowds running into the tens of thousands, five figure attendances at Priestfield are the exception rather than the norm. Leeds are a big club with a big fanbase, and Gillingham are a small club with a small fanbase. But despite the contrasting qualities, Gillingham now find themselves in the midst of a similar situation to that of Leeds a couple of seasons ago.
Gills chairman Paul Scally fell into a similar trap to that of Peter Ridsdale, and thought that if he spent heavily, football’s gravy train would carry him along and everything would work out for the best. Just like Leeds, it has proved to be a catastrophic error.
Whereas Ridsdale ploughed finances into the team, Scally opted to pump funds into facilities. Gillingham’s Priestfield Stadium needed rebuilding – and the job was half completed when he made his financial faux-pas. With the Rainham End and Gordon Road Stands both complete, offering fans good views and protection from the elements, Scally’s attention turned to the flagship Medway Stand, which was set to replace the old main stand. The two-tier stand would hold a vastly increased number of fans, and just like the other two new stands, would offer fans a superb view of the Priestfield pitch. But it wasn’t to be an empty stand. Scally had planned for banqueting and conferencing facilities, plus a Chicago Rock Café-style bar to be included as part of the build.
The thinking was sound – the club needed ancillary facilities to help bring additional revenue streams to the club. Gillingham at the time were performing strongly in the Championship (then called Division One), but didn’t have the financial clout to compete with the big city clubs in the division like Birmingham City, Blackburn Rovers and Wolverhampton Wanderers. A glossy prospectus was circulated to fans, press and shareholders alike, detailing Scally’s plans for the Medway Stand. The cost of the development was to be £3.9m. A share issue raised over a million pounds, and well over a million pounds was acquired from the Football Trust. The project was well financed – and while a small debt was likely, it wouldn’t be significant enough to cause concern, and the facilities would be in place to recoup any money borrowed in the ensuing years. Indeed, when asked about the likely profit made by his new facilities, Scally replied that they would make £1.2m a year at a “conservative estimate”.
But Scally, so it appears, got greedy. He made the decision to up the ante on his flagship development, and more finance was sought as the Gills chairman looked to finance the additional fixtures, fittings and features of the new development. Subsequent club accounts show the additional spend to be in the region of £5m, taking the total cost of the development to around £9m – a massive difference to the £3.9m quoted to the shareholders, fans and press before the commencement of the project.
During this time the Football League agreed a TV deal with the ill-fated ITV Digital meaning Scally had another additional potential income to help finance the extra spend on the Medway Stand – but when the deal went flat mid-season, clubs were left without the money they were promised. Scally has subsequently blamed ITV for the financial state of the club, despite the fact that the money never arrived in the club’s bank account – and the fact that work on the stand commenced before the TV deal was even signed.
With the club’s borrowings passing the £5m mark and approaching the £10m mark, costs had to be cut. The much-vaunted conferencing and banqueting was failing to attain anything like the figures mooted by Scally – and the entire operation was sold off to a third-party, catering firm Compass, for £400,000 per year, a third of the “conservative estimate” made by the chairman at the start of the project.
Meanwhile, the team on the pitch began to suffer. The players who had taken the club up into Division One and fired the club to their highest ever League finishes was showing signs of age. The majority of the squad were the wrong side of 30, and were finding it increasingly difficult to stay the pace at Division One level. The squad needed regeneration, but little money was forthcoming for team strengthening. Indeed the opposite happened, with star striker Marlon King sold to Nottingham Forest for a cut-price cash deal of £900k, while playmaker Paul Shaw was allowed to leave for a pittance and midfielder Simon Osborn also departed the club. Three of the club’s most important attacking players left in a short space of time and their replacements, brought in at a mere fraction of the cost of their departures, simply weren’t up to scratch.
The Gillingham squad deteriorated to the point where they missed relegation by the narrowest of margins – one goal, prompting Scally to promise the Gillingham fans that he wouldn’t let something like this ever happen again. It proved an empty promise, as the Gills found themselves in a relegation battle the very next season. Manager Andy Hessenthaler had run out of ideas with his tired ageing squad, and eventually stood down, and even though the club produced a late rally under new boss Stan Ternent, the Gills didn’t have enough to save themselves, and on a wet and miserable day at the City Ground, Nottingham, the Gills were relegated.
Relegation was an opportunity to start afresh, with smaller overheads, and maybe a chance to bounce back, but since their relegation the club has veered from mediocrity to incompetence, both on and off the field, as Gillingham FC hit the headlines after being kicked out of the FA Cup by non-League Burscough, while more recently the club fell into disarray when EDF Energy cut off the club’s electricity supply due to a massive unpaid bill. During this time more players left the club, only to be replaced by worse ones, all while the club’s debt continued to increase. Fans drifted away from Priestfield, disillusioned with the way the club was being run and the apparent lack of respect for the support. A vote was conducted while the club were in Division One asking the fans which kit design they’d like. Despite a strong preference for a blue and black striped shirt, Scally shocked and appalled fans with not the fans’ choice of shirt but his own – a white kit. Only after a strong reaction by the fans did the chairman reverse his decision, but it demonstrated the lack of respect the club seems to have had for the supporters.
Today the club stands deep in debt, with Scally spouting rhetoric about “debt restructuring”, and the importance of a move to a new ground. Many fans have questioned his ability to deliver a new ground, based on his inability to manage the redevelopment of the current stadium – the fourth stand, the Brian Moore Stand, remains an uncovered temporary seating area. As for the debt restructuring, many fans are convinced it will mean the remortgaging of, or worse still, the sale of, Priestfield Stadium. For the first time in over 100 years, Gillingham Football Club may not even own its own ground.
Some fans have posed the question, would we have traded the Wembley matches, the promotion, the FA Cup runs and the great matches in Division One for financial security today. And while a good many have said yes they would trade, the point is they wouldn’t have ever needed to decide. All of the highlights I’ve mentioned happened BEFORE the club was plunged into debt. In short, the club could have had its cake AND eaten it. Sadly, it appears to many of us that Paul Scally’s eyes were bigger than his belly and his desire to have a bigger cake than he could cope with may yet leave the club in a state of ruin.
Debts can be restructured, but they’re still debts. The club had plenty of assets five years ago, and one by one they’ve been sold off, many of them for a song. The only asset left is Priestfield Stadium. If fans’ fears are proved right, that too may soon be gone.