Tuesday, July 27, 2010

Murray Minted

I thought it was curious that Richard Murray appeared to be the only Charlton director present at Barnet on Saturday.

However now it seems clearer, because surely the best news to have emerged from the club since May 2006 was quietly released on the website tonight.

In terms of the club's fightback from the lowly position in which it finds itself, I find myself quoting Winston Churchill: "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

There isn't enough information in the brief statement to form very robust conclusions, but the wording makes it clear that it's now a one-man show.

Murray describes it as a management buyout of the Plc's two subsidiaries (but the debt to the directors sits at the Plc level), and that he obtains control of the 'football club'.

My knowledge of the legalities of corporate finance are rusty, but I would guess therefore that the Board has agreed to sell (or more likely give) the subsidiaries to Murray, in return for a substantial restructuring of the holding company (plc) debt.

Given that the value lies in the subsidiaries (the stadium and the football club), it implies that the equity in the Plc is worthless (which is what I thought all along).

More information on the exact structure of the transaction will no doubt be contained in the proposal to be put to shareholders.

It may be a mere coincidence, but the company that Murray founded and remains a key shareholder of (Avesco), received a substantial positive legal ruling earlier this month relating to a dispute with Disney.

The stock has rallied 38% in the past month, providing a meaningful boost to his net worth.

If this very recent factor is indeed contributory, then it perhaps explains why the clear focus of the club has remained frugal until today's sudden announcement.

Either way, Murray was certainly under no obligation to put more of his wealth at risk in SE7, so it once again proves just how fortunate we are to have him (now very firmly) at the helm.

As I have discussed on this blog, the club's financial difficulties were complicated by the fact that the bulk of the debts were owed to directors.

With regard to the restructuring of the debt, presumably Murray has persuaded his fellow directors to agree to a substantial haircut on their portion.

This is a valuable gesture on their part (although their other options were admittedly limited), and this would seem an appropriate moment to thank them warmly for their own support.

Their financial circumstances are varied and hard to decipher, but I think it's fair to say that some will have taken a substantial and meaningful hit to their net worth in favour of the club's future.

I suspect that in time they will not regret this particular move, but I'd imagine they deeply regret ever agreeing to lend the club money in the first place.

So I view this as extremely positive news, but from a low base. It is likely merely a stepping stone and the future remains unclear, even if one man now has substantially more ability to dictate it.

Murray will seek new investment, but the football industry remains deeply in the doldrums. Rarely a week goes by without another fellow mid-sized club displaying extreme financial distress.

Unfortunately I suspect the scope for genuine 'real money' institutional investment is virtually nil, so horrifically are football club finances biased towards its employees (they make investment banks look positively shareholder-friendly).

We continue to hope for the classic dumb billionaire (ideally a well-intentioned one) or more likely, precisely the type of foreign (particularly Gulf-based) investor that we so nearly secured in 2008.

The club's strong family reputation and London location should not be underestimated in this regard.

Simply taking on new investment in the form of a million here and a million there will not take us much further, and the club's finances will again resemble those that Murray has clearly worked so hard behind the scenes to restructure.

So today's news removes some considerable uncertainty, but we remain far from the Championship-level stability that seems a reasonable medium-term target.

The most likely short-term outcome remains continued frugality, perhaps with a highly limited budget for transfers provided to boost our depleted squad.

Murray's plans for the club rely upon improvement on the pitch, which Phil Parkinson will now be under pressure to deliver.

Whatever the resources ultimately at his disposal come August 7th, if this is not achieved then all other plans are moot.

Sunday, July 25, 2010

Low Barnet

Underhill is a curious ground.

With its sloped pitch and seven different stands and terraces, it certainly can't be accused of being soulless.

Unfortunately with just one division separating the two clubs, they are the type of surroundings that Charlton may increasingly have to get used to (especially so based on this hopefully irrelevant performance).

After the disappointment of the World Cup, I dropped off my son and made the short journey from my parents' house with a frisson of excitement at the new team that Phil Parkinson is being forced to build.

An optimist might argue that it is potentially reminiscent of season 1985/86, when Lennie Lawrence signed the relatively unknown likes of John Pearson, George Shipley, John Humphrey and John Pender.

Barnet are undergoing a similar rebuilding process under former Gills boss Mark Stimson, so the relative stability of the opposition cannot be offered as a mitigating factor.

Parkinson selected a strong side, and gave seven players a full ninety minutes on a warm summer's day (Elliot, Dailly, Doherty, Solly, Semedo, Wagstaff, Bauza).

Conclusions based on a single non-competitive fixture can be taken largely with a pinch of salt, but here are a few:

- Christian Dailly's new contract is the best piece of business the club has executed so far;

- Dailly and Gary Doherty will lack pace but they are probably canny enough to avoid being done too often (the Scot is likely to play the deepest of the two);

- Chris Solly has potential but he needs to become a more intelligent player, not least given his lack of height (not that this has stopped the likes of Philipp Lahm becoming world class) - just because you can challenge for a header, doesn't imply that you always should;

- neither Solly nor Johnnie Jackson will be overlapping their pacier midfield counterparts very often - given the above mentioned concerns about Dailly/Doherty, this may not be a bad thing;

- of the three senior central midfielders on show, only Therry Racon offers a hint of creativity - I consider Jose Semedo's 'blocking and tackling' role as crucial, which likely means Alan McCormack will start the season on the bench;

- Kyel Reid and Scott Wagstaff offer plenty of hope for good old-fashioned wingplay, but will they see enough ball?;

- Akpo Sodje is very poor technically - unless he can utilise his raw size and strength more productively, then we will really miss Deon Burton's more subtle approach;

- Guillem Bauza looked as though he'd be happier sipping espresso in a pavement cafe, or perhaps starring in a low budget French movie - he is likely to win some female hearts if he signs, but much better will be required to deserve a contract;

- assuming Sodje will indeed be the main man upfront, then some type of clever 'fox in the box' striker would appear to be the best partner alongside to mop up some of the havoc the Nigerian causes - more so at least than the dainty touches of Bauza on this showing.

Wednesday, July 14, 2010

Desperate PP

Preseason news from The Valley has been deflating, but hardly surprising.

The club had gambled that our stint in League One would be as brief as possible, but this possibility took off with Nicky Bailey's penalty.

Back in May, I wrote: "Some appear to believe that administration is an inevitability, but this ignores the fact that the debts are largely owed to the same people (ie. the directors) who are responsible for deciding whether to opt for administration."

The financial decisions taken this summer would appear to be consistent with my previously held view.

I believe the Board will now do whatever it takes to make the club cashflow positive at the operating level.

Decisions relating to team matters will be conservative, with less emphasis on taking implicit short-term 'bets'.

Expectations for Phil Parkinson will be lowered to reflect changed circumstances; stability is key for now.

The aim must be to rid the club of any sense that it is becoming a 'basket case', and thus re-emphasise its genuinely attractive traits to future potential buyers even at League One level.

Despite our current lowly position, these traits are real and valuable. Three-quarters of the stadium is modern and large for example, whilst the club's family reputation has been rightly earned.

The club's location in a growth area (just a stone's throw from the bright lights of Canary Wharf) provides scope for further support, in addition to the relative stability of its existing fanbase.

Administration would achieve nothing from the perspective of those directors who subscribed to the large recent bond issue.

Instead they must hope that if some stability can be achieved, they might just be able to walk away financially 'whole', with perhaps some value even ascribed to their equity too.

Even if no suitable buyer can be found, at least they get to avoid making a sad situation even worse by continuing to throw good money after bad. Some of that positive cashflow can at least service the debt, even if it can't yet repay it.

If expectations on Parkinson have been lowered in the boardroom, this is not necessarily true of the 8,000+ season ticket holders who will form the majority of home support.

They will expect play-off contention at least, a tough target given the desperate look of the squad right now. The idea that a Charlton XI will participate in a couple of preseason friendlies is a rather ironic sick joke.

At least reasonable value has been secured for those departed players who were under contract.

The Nicky Bailey deal in particular was generous for a player who is effectively unproven in the Championship (we finished bottom in 2008/9 after all, despite his efforts).

Fraser Richardson's exit was a disappointment, especially given he was captured by League One's hot favourites.

An intelligent and consistent player, he would have made an ideal captain if Christian Dailly does not re-appear in an Addicks shirt.

However in essence his acquisition from Leeds on a free represented one of the above mentioned short-term bets, because his wages must have been relatively high in the absence of a transfer fee. Such extravagance cannot be tolerated in this new era.

I will be sad not to see Lloyd Sam in a Charlton shirt again, even if he left me pulling out what's left of my hair.

In my view, he could have been one of the best players in the Championship let alone League One, but whether for reasons of fitness, motivation or whatever, the end product rarely reflected his obvious potential.

Losing Darren Randolph would appear to be somewhat odd, as if negotiating his contract was forgotten amidst the late-season drama.

He will need to be replaced (perhaps a season-long loan of a young Premiership prospect would make sense here), but it seems strange to train a player for years, see him finally break into the first team, then watch as he disappears to the SPL for free.

It reminded me of Josh Wright's transfer to a Championship side, again for nothing.

The three acquisitions so far (Doherty, McCormack, Jackson) all appear sensible, even if they hardly set the blood racing.

Nonetheless, the pool of available free transfers must be high given the financial constraints pervading domestic football, so the scouting work done by Phil Chapple's team will hopefully now come to the fore.

Parkinson has targeted eight more signings, which would appear to be a minimum assuming others are still to leave the club (eg. Youga, Burton).

I hope the likes of Solly and Wagstaff will now be given a proper chance, in favour of the myopic appeal of the types of loan signings that once again characterised last season.

The new contracts they have been handed tell me that the club believes they are definitely 'good enough' now to warrant that chance.

Little more has been said about the supposed deal struck with Liverpool since Jonjo Shelvey left, but maybe there's a positive surprise coming here. I wouldn't even rule out the prospect of the bald starlet himself returning on a long-term loan.

In the meantime, I'm hoping to attend some if not all of the relatively local friendlies at Bedford, Barnet and Watford, even if I usually severely regret attending a preseason game about seven minutes into it.

I was hoping the World Cup would make me forget about Charlton for a while, but it was so dull that it made me realise what was really important in my footballing life. Up the Addicks!

World Cup Reflections

"It's not every day that you get to be affectionate around something German. It just doesn't seem to happen that often." (Larry David, "Curb Your Enthusiasm")

Ever since Germany's sparkling opening win against Australia (the first of a trio of games in which they'd register four goals), I have found myself thinking of my hero Larry David's quote above.

He was referring to a dog not a football team, but in a generally disappointing World Cup, Joachim Loew's dynamic young team was one of the few to lift the spirits

During the tournament build-up, we were led to believe that European teams would be favoured due to the winter conditions in the Southern Hemisphere.

South American sides initially threatened to disprove this theory, but with the slightly dishonourable exception of tiny Uruguay, it was indeed Europe's tournament in the end.

The Jabulani ball was rightly castigated in the media. It was enormously frustrating to watch virtually every long-distance shot soar over the bar as if it suddenly sprouted wings.

As mentioned in a previous post meanwhile, the vuvuzela ruined the event as a television spectacle (though perhaps they did genuinely add to the atmosphere for those present).

With the ebb and flow of the crowd lost in the cacophony, many of the (regular) mediocre matches simply drifted to their conclusion when some variability in atmosphere, might have been the catalyst for some improvement.

The scheduling of the quarter-finals was odd, and not conducive to drawing in those (now) neutrals whose interest in the tournament was rapidly waning.

The mouthwatering Holland vs Brazil fixture took place on a Friday afternoon for example. Why weren't all four quarter-finals played during the weekend of 3/4 July?

The BBC and ITV's coverage was stale and predictable meanwhile. There's nothing intrinsically wrong with their '3 men and a presenter' model, but it helps if there's a degree of disagreement and genuine debate on show.

Football fans are fully aware that an 'old boys' network is at work governing managerial and coaching employment at domestic clubs, but broadcasters are free to display less nepotism.

Great player for sure, but just how did Alan Shearer carve out a post-retirement career in television? Give me an opinionated journalist any day, rather than this type of bland know-it-all 'pundit'.

Meanwhile don't even get me started on James Corden's pitiful ITV post-game show. Truly an embarrassment.

Back to onfield matters, if the outstanding team in the tournament (Germany) was not ultimately victorious, then few neutrals could bemoan Spain's victory given the purity of their passing game.

It may be pure however, but it's not particularly penetrative with all four of Spain's knock-out stage wins being a 1-0 scoreline.

Jose Mourinho's Inter brilliantly snuffed out Barcelona's flair in the Champions League semi-final, and one wonders if Holland's brutal approach was a warped interpretation of the special one's tactics.

In truth, Inter's victory was a function of a stunningly disciplined pair of 'banks of four' in front of Julio Cesar's goal, combined with lethal counterattacking goalscoring. Holland displayed neither.

My favourite statistic of the tournament, is that the only unbeaten team was New Zealand.

As a rugby-dominated country of just four million people, they stuck two fingers up at those who sneered that their ilk had no place at the World Cup table.

My goal of the tournament was undoubtedly Asamoah Gyan's brilliant winner against the USA, displaying superb control, strength and finishing at a pivotal moment in an intriguing game. It was a dreadful shame that his penalty miss would deny Ghana a semi-final place.

Although hardly original, my player of the tournament must be Andres Iniesta. Beautiful to watch, with exquisite balance and wonderful touch.

He put in an extraordinary performance in the 2009 Champions League final, and has now followed it up in the most important national team competition too.

If the likes of Messi, Ronaldo and Rooney suggested they might really be mere 'luxury' players, Iniesta was a 'team player' with real class.

My final thoughts however would rest upon precisely what relevance the World Cup holds today, when the aforementioned Champions League displays virtually all of the finest global talent, yet does so on an annual basis, and without the inherent rigidity of nationality playing a role.

We can all put together our 'dream team' from this year's World Cup, but only the Champions League can actually make it a reality.

The homogeneity of national teams can make for pretty staid football, when the players lack the imagination usually provided by their club teammates. England would seem to be a fine example of this trait.

Not a single match at the World Cup compared to the finest Champions League match-ups, whilst the two-legged affairs of all ties except the final avoid the 'too important to fail' nature of knockout matches, which can produce performances like Holland's on Sunday.

With an entire nation watching at home with baited breath, and with no more than 120 minutes to secure victory (or else risk a fully four-year wait), is it any wonder that so many late-stage matches were played with such flair-restricting tension?