Fans' questions answered about Blackpool FC finances

Blackpool supporters' organisation Fans Progress Group has provided The Gazette with minutes of a meeting with BFC secretary and director Rod Dyer, who answered questions about the club's finances. The full minutes are printed below.

Friday, 8th September 2017, 9:00 am
Updated Monday, 11th September 2017, 12:42 pm
Rod Dyer

Dyer stated that the club has approximately £5m in cash reserves which could be used to offset the loss of revenue brought about by the supporter boycott for up to five years, after which the club could look into cost reductions, possibly resulting in a less competitive side.

Dyer also answered detailed questions about loans/payments from the club to Owen Oyston and about money invested into the club by Valeri Belokon. Dyer stated that Belokon invested close to £9m in total, which went towards a 20 per cent shareholding, a player transfer fund and stand developments, and that BElokon’s daughter had loaned the club £1.85m.

Dyer also stated that Belokon had been repaid more than double the £1.5m he invested in the transfer fund.

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Here are the minutes of the June 14 meeting.

Set out below is information provided to the FPG in a follow up meeting (14/06/2017) with Rod Dyer on behalf of Blackpool FC Ltd and Blackpool FC Properties Ltd (formerly Segesta), which was supported with examination of relevant financial documentation.

Players, manager and coaching staff investments from 2010 to 2016.

Wages - £60m

Player Transfer Fees paid out: £7.87m

Transfer fees received = £14.55m (reducing to £12.88m after payment to Valeri Belokon, see below)

The FPG asked RD about the player fund agreement that was set up between BFC and Valeri


RD said that VB invested £1.5m into the player fund to buy four players mainly as a result of Ian Holloway convincing him (VB) that he (IH) could recruit players, improve them and make a profit on them.

RD said the ‘transfer trust agreement’ meant that VB would receive 70 per cent of any profit made on the sale of any player bought using this fund and the club 30 per cent.

RD added that only £900.000 of the £1.5m was used and following promotion to the Premier League VB was paid back his £1.5m plus an additional £68,000 interest payment. The FPG asked what happened to the agreement. RD said that after VB was repaid his initial investment they agreed to change the terms to 70 per cent for the club and 30 per cent to VB.

Following the sale of players who were bought with this fund, VB was paid an additional £1.68m, so from his original £1.5m investment he got back a total of £3.17m.

The FPG asked how much did VB invest in the club in total and how was it used. RD said that as well as the £1.5m player fund he bought 20 per cent shares in BFC Ltd for £1.8m, along with £850,000 gifted to the club.

RD said that VB’s company Valeri Belokon Football Assets invested £4.75m for his joint venture with the club in the South/SW corner development.

His daughter also made a £1.85m construction loan to Segesta (total £9.25m).

RD added that the £1m settlement from the February (2017) court case will reduce this loan.

TF said it was BFC’s belief that the development construction costs should have been included in the calculation before the distribution of profits, but the court ruled otherwise.

The FPG asked for information regarding loans made by BFC Ltd. to Segesta, Zabaxe and any other companies.

RD confirmed the following : A total of £28.6m (May 2014 accounts) was loaned to Segesta and an £11m payment was made to Zabaxe. There is one other small intercompany loan made to BFC Hotel for working capital, which peaked at £700,000, but this is now being repaid out of hotel profits and is now down to approx £400,000.

RD added that all the loans are unsecured, interest free and repayable on demand.

RD advised the £28.6m loan to Segesta was invested for the benefit of the football club as follows :

East stand: £2m

South East corner: £3.3m

South/SW corner and BFC Hotel fit out: £3.3m

North/NW stand outstanding contracts: £4.7m

Stadium improvements (e.g. floodlights, turnstiles, new seating etc.): £1m

Travelodge hotel: £7m

Other miscellaneous investments: £1.8m

Cash: £5.5m

RD said the £5.5m cash was transferred to protect the club during the banking crisis. The football club and Segesta use different banks, so it was done to protect the club.

RD confirmed that Segesta (now Blackpool FC Properties Ltd) would support BFC with this cash as required.

RD said you can’t separate Segesta from Blackpool FC, the parent and subsidiary companies in terms of running and managing the football club. Segesta manages the assets, whilst BFC Ltd operates them.

The name was changed from Segesta to Blackpool FC Properties Ltd to make it clearer to people how the club is run.

The FPG asked if any of the monies loaned to Segesta from BFC Ltd was transferred to other companies.

RD said that only £1.8m of the football money loaned had been transferred elsewhere but this was not detrimental to the football club because it was repayable on demand and the club has always been left with significant funds to carry on its core business.

RD added that Segesta has made loans to other companies from its own monies but this isn’t from the football money loaned to it from the club.

The FPG asked had there been any further loans from Blackpool FC to Segesta since the May 2014 accounts.

RD said there have been further small loans since, though nothing significant.

Moving to the payment made to Zabaxe, RD said Zabaxe is Owen Oyston’s service company that the club made an £11m payment to.

However, after deduction of corporation tax, which BFC would have had to have paid on this amount if the money had not been paid, the payment was actually £8.3m.

Some might consider this money not being for the benefit of the football club, but it should be taken into account that Owen Oyson has never taken a salary from the club, and that from approx. 1987 to 1999 Owen Oyston and Zabaxe loaned £5m to BFC when it was on the verge of bankruptcy.

He also paid (via Protoplan) £7m for the construction of the North and North West stands because only £2.5m of the £9.5m cost was paid from grants, not all of it as some believe.

Owen Oyston did not have all of this £12m repaid.

£4.1m of the £5m Zabaxe/Owen Oyston loans to BFC was converted into share capital in BFC Properties and remains as part of the £5.5m share capital Owen Oyston has put into that company.

FPG asked RD if he could confirm or dispel rumours that loans were made from BFC to other companies, such as the NHS and housing development at Whindyke farm and a Lytham dress shop. RD said these rumours are not true.

He that that what supporters might confuse as football club money being used at Whindyke farm is in fact money invested from a separate company that Owen Oyston owns 50 per cent of. That investment is completely separate and has nothing to do with Blackpool FC, nor is it financed by BFC.

FPG asked are there any other companies that the football club has invested in or loaned

money to. RD answered no.

The FPG asked RD to confirm how revenues from investments are distributed.

RD said all revenues from the stadium except the BFC Hotel are paid into the Blackpool FC’s

account, this includes revenues raised from rentals, concerts and rugby festivals.

Although the money from rentals actually belongs to Segesta, Owen Oyston decided to leave this money in the football club. This could be used to pay off some of the loans it received from the club but the full loan remains repayable.

FPG asked where does all the supporters’ money go. i.e. revenues from ticket sales, programmes, club shop and tea bar purchases?

RD said all their money goes into the football clubs account to pay for footbal-related costs i.e. players wages and transfer fees. Even money raised from the use of the VIP lounge for events, parties and funeral wakes goes into this.

The FPG asked how are revenues from the 1000-year South/SW corner joint venture distributed.

RD said this is split 50/50 between VB’s company VBFA and Segesta, but the revenues are actually paid to Blackpool FC.

Segesta’s (now BFCP) share might be left in BFC and again could be used to pay off some of Segesta loans, but no decision as yet has been made on this.

The February (2017) court judgement means that the money to be paid to VB will be taken out of the football club, not Segesta.

The FPG asked is it correct that revenue raised from the Travelodge is split 50/50 between the Football club and Segesta ?

RD replied no - the football club receives an annual flat fee of £250,000, with the remainder paid to Segesta.

It is coincidental that the annual revenue raised by the hotel is £530,000, which might look like a 50/50 split.

The fee received by the football club could again be used to pay off Segesta’s loan but it isn’t. Again the full value of the loan remains repayable.

The FPG asked why does Segesta not use the money repaid to the club to pay off the loans it received from the club ? Ie, the £250,000 annual payment from the Travelodge, stadium rentals and Segesta’s share of the joint venture. FPG assumed there was a money-saving reason for this, such as tax savings?

RD said the Travelodge payments will be paid only to BFC. The stadium rentals and joint venture funds could be used to reduce the loans but this had not been decided. There are no financial/tax reasons involved.

FPG asked how does the Not A Penny More campaign affect the club financially?

RD said that historically money raised from supporters has never covered the football running costs, including player transfer fees and wages.

Owen and Karl have always supported the shortfall from other sources.

The club currently has approx. £5m in cash reserves, which will make up any shortfall until it runs out. That may be in four or five years at the current rate.

FPG asked what would happen then. RD replied that Karl Oyston had already said publically that if necessary the club may have to be run in manner that befits its level of income, which might mean less money to pay players and would possibly result is a less competitive team.

RD said it’s the obvious choice to save money by reducing player spending as contracts expire, but there could be other options.

The FPG thanked RD for his time and co-operation. The meeting was concluded at this point.