Published on September 16th, 2020 | by Paul Gallagher0
BFCST Update: Court Case and Oakwell Stadium
Earlier today Barnsley FC Supporters’ Trust got a greater understanding of the current ground ownership situation at the football club and why the ownership group have explored the possibility of playing home games away from Oakwell.
A club insider spoke in detail about the ownership of Oakwell and the recent news stories sighting boardroom disagreements. In this article, we’ll try and explain the history behind the sale of Oakwell, why there is a potential court case and what has prompted the majority stakeholders of the ownership group to look at alternatives to Oakwell.
- A 6M additional payment was due to the Cryne’s holding company based on retaining or regaining championship status. This was mutually agreed to be reduced to 3.5m in the March of the League One promotion season at a point where promotion was not guaranteed.
- BFC Investment Company no longer wants to purchase the stadium due to 3rd party interest via a restrictive covenant.
- The Cryne family and their legal counsel believe this 100-year-old covenant is un-enforceable
- BFC Investment Company are unhappy with the original deal and have stopped paying the remaining 2.75m instalments on the mutually agreed 3.5m
- BFC Investment Company are dissatisfied with the terms of tenancy that means they need to pay many times more than the stadium rental in maintenance costs and would like the Cryne’s/Council to reduce this
- The option to move away from Oakwell is under investigation due to this cost.
- This feeling is that this will not happen and is a tactic to put pressure on BMBC/The Cryne’s but given it is instigated by the majority shareholders it is a possibility
- The lease has 8 more years to run and expires on 24/10/2028
BFCST hope that the talk of moving away from Oakwell is nothing more than posturing by BFC Investment Company Limited. We will continue to encourage and support a resolution to the current situation that ensures we see football played at Oakwell alongside success for Gerhard Struber and the team.
The sale of Barnsley Football Club (2002) Limited
- Analysis of the sale of Barnsley Football club seems to show that the Cryne Families holding company sold 100% of the shares of Barnsley Football Club Limited to the Hong Kong-based BFC Investment Ltd for £10m. The holding company then invested £2m of this in return for 20% of the Hong Kong Investment Company Limited.
- The Cryne family effectively-remaining hold of 20% of the Football Club
- The agreement included a time-limited option to buy the Cryne’s 50% share of the stadium and land (held in Oakwell Community Assets Ltd).
- The sale agreement included a provision for an additional payment of £6million pounds to The Cryne’s holding company which was to be paid if the club retained Championship status under Morais or, if relegated, were promoted back to the Championship at the first attempt.
- During the March of the League one campaign when promotion looked a possibility under Daniel Stendel, The Cryne family and BFC Investment Ltd agreed to a compromise of a guaranteed £3.5million payment paid to Cryne’s holding company at the rate of 250K per quarter irrespective of promotion.
- BFC Invest Company Limited only paid £750K instalments of the £3.5 million. Leaving a balance of £2.75million
The option to buy Oakwell
- At purchase, the BFC Investment Company had a 6-month option to buy 50 per cent of Oakwell owned by the Cryne family.
- The Cryne family agreed to extend this option, and the BFC Investment Company invoked the clause to buy the 50% share in January 2020
- Barnsley Council has stated no discussions have taken place about the sale of their 50% of Oakwell Stadium.
The risk of buying Oakwell and why the consortium won’t purchase it
- After invoking the option to buy Oakwell, it became clear that a restrictive covenant involving a 3rd party put at risk any potential investment by the BFC Investment Company.
- It is the view of the Cryne family and their legal counsel that this 100-year covenant is non-enforceable.
- Paul Conway/Chien Lee see the risk as being too great, so the purchase of Oakwell will not go ahead.
Maintenance on the Oakwell Stadium
- Barnsley FC Limited pays Oakwell Community Assets Ltd (Jointly owned by the Cryne’s and Barnsley Council) a substantial yearly rent.
- Barnsley Football Club is required to pay all of the maintenance and upkeep of the ground.
- The cost of the maintenance has been substantially more than the rent paid.
- A yearly maintenance cost approaching 1million pounds was mentioned but not verified.
- The lease has 8 more years to run and expires on 24/10/2028
Chien Lee / Paul Conway’s point of view
- Paul Conway/Chien Lee believe that the risk to the ground purchase that the restrictive covenant provides is too significant and was not fully disclosed at the time of sale.
- Since the sale can’t go ahead, staying at Oakwell equates to a large rental and even higher maintenance cost.
- Paul Conway/Chien Lee would like to see contribution to the maintenance of the stadium from the holding company (Owned by the Crynes/Barnsley Council).
The Court Case
- It is believed Conway/Lee feel aggrieved that the purchase of the stadium was never a real option, and this explains why subsequent instalments of the outstanding £2.75m were not made.
- The belief within the club is that the Cryne’s have a stronger legal/moral position, but there is hope that there will be a compromise before the matter reaches court.
The Cryne Family View
- The Cryne family do not see the sale of the ground linked to the agreed (reduced) 3.5m payment.
- Further detail can be found in this Barnsley Chronicle article and this more recent statement
Moving from Oakwell
- Given the stadium costs, other options to play away from Oakwell are under investigation to reduce the considerable cost of rent+maintenance that will currently account for a large chunk of the budget.
- This nuclear option is believed to be a way of putting pressure on the company that holds the stadium
- The consortium is investigating moving away from Oakwell