The battle to gain control of Birmingham City has taken a decisive twist after a US hedge fund declared an interest in the embattled Championship club.
Tom Wagner, co-founder of New York-based Knighthead Capital Management has emerged as a potential purchaser for the stricken Second City outfit. News broke Stateside that the financier and his firm, which has assets under management of $9bn, are ‘close’ to securing an initial £35m deal.
European tour chief executive Keith Pelley and former Microsoft salesman Jeremy Dale have been acting as brokers and discussions with the Americans are at an advanced stage. The group does have exclusivity to conclude business - and if they do the Blues will become yet another English club to fall under American control.
The buyers will re-claim ownership of St Andrew’s - and part of their plans will be to re-develop the site as social housing. Discussions are underway to build a new stadium on a 40-acre piece of derelict land that was formerly used as a go-karting track at Birmingham Wheels.
That news will be given a lukewarm response by the club’s supporters as it presents huge logistical problems for a fanbase that is currently at its’ wits end. But there have been site visits conducted with the knowledge of Birmingham City council and the Americans are drawing up plans.
News of a concrete offer will come as a huge relief for a fan-base - and that will outweigh any initial scepticism over the ground-move - that has watched helplessly as their club has been ground into the dirt by two Far East owners.
Shortly before the Blues’ 2011 Carling Cup triumph over Arsenal, it was off-loaded to former Hong Kong hairdresser Carson Yeung who was later convicted of a string of serious money-laundering offences.
Following the fall-out, it eventually passed into the hands Birmingham Sports Holdings Limited, a Hong-Kong Stock Exchange-listed front for a fragmented collection of associated companies, headed by Cambodian businessman Vong Pech.
Under the stewardship of hapless chief executive Xuandong Ren, the club slipped slowly towards the bottom reaches of the Second Tier, despite handing out huge contracts to significant chunks of the playing staff.
This largesse came at the expense of undertaking basic maintenance at St Andrew’s, leaving the lower tiers of the Kop and Tilton Road end of the stadium as unusable - and the club now faces a £6m bill to right the problem. It has also mortgaged the site in an effort to make ends meet.
It is forecast to lose around £40m in the next three years, meaning that the Americans will need deep pockets to fund the development and also hand boss John Eustace a decent budget to consolidate and kick on in the Championship.
The Americans will have to take a leap of faith, however, with the Chinese owners who are demanding the sale is conducted in three stages.
It will be carried out in a trio of tranches with an initial payment handed over for a minority shareholding with the controlling interest concluding the official takeover in the next 18 months.
