This second part of the coverage from the club's Tuesday press conference covers finances and succession.
Where are we financially at the moment, because crowds have dropped and are nowhere near the previous break-even point?
NC – we’ve gone through a period of change. As everybody knows we’ve had to cut our cloth accordingly since last season. That affected the players we could keep and those we could recruit, which David has already talked about. Since then, and whilst we’ve had some fantastic performances and results away from home, probably Colchester was the first time many of our supporters have seen what the team is capable of when we have all of our men fit and firing. It was excellent, and you could see how the fans responded to that. That’s all good news. The difficulty is that losing five in a row at home hit our gates, and it meant that the income we got is less than what we budgeted for, that’s plain to see. When you’re getting 3,500 fans, as we did on Saturday in those conditions, it puts a hole in your finances. The way we’re approaching things is that we factored in some contingency when we started. We’ve talked in the past about spending a lot of our budget early on, and therefore that restricted us. It’s different now which means we can absorb some of these kinds of ups and downs without it being crisis time. I think that stands us in good stead. It doesn’t mean there’s cash all over the place, and we’ve got to be really careful with it, so it’s about getting more from what we spend rather than how much we spend in most cases for us. You can see in this league, money is no guarantee, and we’ve been really good with it so far. I think everybody on the football side understands that, and I think the fans understand it as well. They just want to see players committed and doing what they can for the cause. That puts us in a better place than we might have been, but it is tough, there’s no getting away from that.
In a recent CUOSC update the phrase ‘significant financial challenges for the club’ was used. Can you elaborate on what that means?
NC – there’s no getting away from the fact that with the gates we’re currently getting at home, they’re going the wrong way. The gains we made during the recent play-off season, where we were up to 5,000, have completely reversed. We’re back to the days when the club entered the division again, and there’s no escaping that. If we’re operating with an expectation of a certain level of fans, and they don’t come through the gate, then there’s a shortfall. In the past we spent right up to what we thought we were going to get, and it gave us a problem. We don’t do that any more. We’re getting a shortfall compared to what we planned at the start of the season and that brings pressure. It’s as simple as that. It’s not rocket science, more fans is good for everybody, and that’s what we need. That’s why home form is absolutely crucial because that’s an immediate impact that can be made. Ownership changes, as the club have found, have no guarantees and can take a hell of a long time. Winning matches at home in the manner we did against Colchester will help everybody immensely. That’s not just for the remainder of this season, but for next season. As the season progresses, excitement is what counts. You need to be playing for something, that’s what brings people out. Whether that’s at the top of the league or the bottom. This club has a track record of having its best attendances in some of the toughest times, so it shows you what results and circumstances can bring. Being sat in the middle isn’t good for anybody, we understand that, because it impacts on results and recruitment.
You talked earlier about contingencies regarding finances, where would you say the debt is now, compared to the summer? Is it up or down, has Andrew Jenkins put more money in, have EWM?
NC – we continue to get support from Andrew and EWM, that hasn’t changed and won’t change in the short-term, and it clearly can’t change while gates are going down, which is why we need to win more games and get gates going up. The level of debt tends to be very constant, it’s been around the £2million mark for the last five years or so I think. The ownership of that debt changes, but the quantum doesn’t.
So this season is hasn’t gone up or down?
NC – that’s because we’re swapping equity for debt.
Is that a continual thing?
NC – as I said earlier, even with the steps we’ve taken in the last window, we’re still at a level of spending that this club can’t support from its own resources. That means we need external funding, and that was the case before the start of the season. If gates then fall short of what we predicted, that has to go on. That will continue. It’s a matter of fact that if we were to operate on what this club could afford on its own, our budget would go down again. There then becomes a point that no matter how good you are with your training and preparation, etc, if you haven’t got the basic tools at the start that makes it really difficult. Thankfully we’re a long way from that, as evidenced by where we are in the league, some of the results we’ve had, and how we’re competing with some of the top teams despite having a lower budget. These are the realities of the club. We can’t compromise the long-term future of the club on hopes and dreams to try and get over the line. We’ve got to be very realistic, no one would thank us if we did that. That would be our responsibility, so having accepted that responsibility we’re doing what’s required to find the right balance.
What about succession, where are we with that? It’s now been 11 years of reluctant custodianship, as some fans call it, so are there any changes on the horizon?
NC – in terms of actual change, no. There’s nothing new, but I think the club is getting in a better shape for anybody who wants to take it on. I think it’s far less risky than it was a year ago. It’s taken a lot of tough decisions but it’s now in a place where it’s more sellable and more investable. That’s part of what we’ve all been trying to achieve, but as far as someone coming in there’s been no change. We still continue to get people coming in and meeting us, to find out what the situation of the club is, but that’s normal in football. There’s always a procession of people wanting to find out where you’re at. It’s another thing for it to actually turn into anything.
CUOSC, are you happy with where the club is in terms of making itself more marketable to people in the future?
JM – one thing I would like to say is that sometimes CUOSC itself is seen as a barrier to future investment because of the 25% shareholding we have. We’ve considered many times diluting that, subject to the approval of our members, if investment was on the horizon and if it was for the good of the club. We’ve demonstrated that with our members backing in the past, and if that kind of thing happens again we’ll have the same consideration.
You said nothing new in terms of succession, is the situation with EWM exactly the same or is there any sign of them stepping things up?
NC – there’s no change at all. I always say in these press conferences that if there’s anything to say, I’ll say it. I’ve had one person since the last meeting who came in and said to us he was interested in a club and that he’d been to a number of clubs. He knew we were available for sale and we met and discussed it with them. Nothing has come of that one, but we usually have one of those every time we meet for these press conferences. People know that the club is there to be taken, and therefore it attracts people to come and look. What I would say is that because of the steps we’re taking, the club is in far better shape on and off the field than it has been.
A number of fans are still saying they would like to hear from EWM. We know what their approach has been since day one of this arrangement, but it is still an issue for people. What are their plans and intentions? I think CUOSC have said similar, is there any sign of that approach changing?
JM – I said in the last directors press conference that it would be really nice from a supporter’s point of view to hear whether EWM had any such intentions or not, but there’s been no movement on that at all, so we’re no clearer. It would be good if we were, obviously.
How much pressure can the club and CUOSC put on to make that clear? To what extent have you done that?
JM – it’s clear to me that they will not, at this point in time, and maybe not ever, make any public announcement on it. They might surprise us and come out and say something, but it’s crystal clear that there’s a disinclination to do that at present.
Do you feel that’s healthy?
JM – as I’ve said, it would be better if it wasn’t like that. What we can’t deny is that the financial backing that we’ve received from EWM has been vital to us being in the position that we currently are.
I think the accounts are due in March, what’s the reason for that particular timing? I think it was April last year, so it’s late in the period without being technically late. Why can’t they be done any sooner? The longer it goes the more historical they become.
NC – we had the discussion at a recent board meeting and the view of the board was to continue to file at the same time every year. The directors think that’s consistent and that’s what we’ll stick to. Whether the accounts are six or nine months out of date, they’re still out of date. As a tool to form any sort of view, they’re a historical record and that’s it. Given that the club has moved on so radically since the period that these refer to, that’s even more so this year.
Part three of this transcript will be on the official website on Friday evening.