The excesses of the festive period had barely been digested when Rochdale AFC issued a statement outlining the need for new investment at the club.
Having celebrated the ‘Up the Dale, Not for Sale’ mantra that had underpinned the club’s fight against Morton House et al’s hostile takeover bid, the declaration on December 30 that the club was, indeed, seeking new investors stuck in the craw for some.
Chairman Simon Gauge understood those feelings, given the fact he’d spent months on the frontline helping to pull the club clear of those unwanted approaches.
Battle-scarred and wary of outsiders, the fanbase is rightly protective of its own. Once bitten, twice shy, as the old saying goes.
However, this time the bid to attract outside investment is being approached with transparency and the chairman was keen to let fans know exactly what his Christmas message and the subsequent call for new investment meant in layman’s terms.
“I put the statement out at Christmas because we want to be as transparent as possible – we have 550 shareholders and a fanbase and it feels really important we try to keep everyone of them as informed as we can on everything that is going on in the club whether that’s good, bad or indifferent,” said Mr Gauge.
“The statement that came out at Christmas was quite long and some of it was quite difficult to understand so I wanted to try to put it into terms that I understand myself to get the message across!
“I suppose the salient point I’d pick out is the fact everyone needs to be aware we cannot just run the club on the model we currently have because, unless we have a really good cup run or we sell two or three players or get other unexpected monies coming into the club, we lose quite a hefty chunk.
“The only way we can address this, as we have done, is last year we had a share issue and we’ve just issued some more shares that we need to sell and we’ll have to keep doing that every year when these other events don’t happen to keep the club running.
“We need that money in to sustain the football club.
“That’s nothing new for Rochdale and it’s nothing new for any other club in the Football League. The higher up you go, the Championship for instance, the numbers become eye-boggling and it’s easier to pile on debt the higher up the pyramid you go. So we’re no different to any other football club but we just have quite a unique model here of having 550 shareholders, many of them fans, while most other clubs have an investor who will help with the cash flow.
“We know every three years or so we’ll have a good cup run or do well in the league and get some play-off money or sell a couple of players for money.
“That does happen over three years, but unfortunately at the minute we find ourselves coming out of the Covid episode where we were facing a £1.5m blackhole and had to sell all of our assets – Jake Beesley, Stephen Humphrys, Ollie Rathbone, Aaron Morley – to get us out of that hole. But it doesn’t leave us with a buffer, so that just brought us back to an even keel.
“We haven’t had any good cup runs this year, so it makes money very tight and we’ve had to sell shares to keep the club solvent.
“We’ve tried to sell them to fans but, understandably in these times and the cost of living crisis, it’s a bit much for fans to dip into their pockets so we are going to have to cast the vote to buy those shares a little bit wider and look for an investor in the club.
“If we look at our academy it’s extremely strong, but at first-team level right now there aren’t many players who are going to make us big money, but the reason for that is, in an ideal world you would only sell one or two a year. Unfortunately, last year as we came out of Covid we had to sell four or five players – we sold all the trophies in the cabinet, as such, to keep the club going and it means we haven’t had another two this year to sell.”
A couple of weeks on from that statement release of December 30, Mr Gauge said things had moved on positively.
“There has been some progress on potential outside investors, but we more than anyone know how careful you have to be with outside investors – there’s the good, the bad and the ugly who want to get involved in football,” he said. “It’s very important we find somebody who is the right fit for the football club, that can provide the cashflow required for us to be able to operate on a good level.
"But we don’t want people coming in here to launder money, people who we don’t know where the source of their finance has come from. We want to find a good investor, not a dodgy one, which we’ve had dealings with in the past.”
Still, the need for new investment is apparent.
“You only have to look at every other club in the league – there’s not many manage to survive with the model we have,” added Mr Gauge. “Most clubs have someone they can turn to when times get difficult to add a bit of cash into the business. The way we operate at the minute means cash is very tight and we have to be very careful with cash.
“That in turn means sometimes we don’t make the best long-term decisions for the club.”
Here's an example.
There’s currently an issue with the kitchen in the Ratcliffe Suite which requires around £30,000 – the club cannot spend that right now, despite the fact such an investment would allow them to operate a takeaway franchise out of the kitchen which would make the club in the region of £70,000 a year.
Balancing the short, medium and long-term best interests of the club is proving a difficult act. But as the current board and fanbase has shown previously, they are not ones to shirk a tough challenge.
Gauge on 'essential' need for training ground/community hub
“The training ground is such an essential long-term aspiration for the club for us to be able to compete with the big boys in the league.
“At the moment, we spend just under half-a-million quid each year hiring out pitches around the borough for our academy teams, we hire the local sports club for our first team to train at.
“Now, if we had a facility that wasn’t costing us that and we could generate money out of, that could potentially make around £1m per year swing in our finances and suddenly that puts us in a whole different ballpark. Again, that would cost money to build – we haven’t got the money to build or put the investment in, so it’s trying to find someone who has that vision that will come and support us.
“There are lots of selling points for the club going forward because if we could get the training ground sorted suddenly we’d become a sustainable club without the need of an investor.
“I believe in the next year or two the fan-led review is going to see a redistribution of monies in football and there will be significant money coming from the Premier League to us. So in the medium term it’s very positive for the club.
“But in the short term we have this cash issue that has to be managed very carefully and that’s why we need to sell the shares at the moment.
“We see it more as a community hub, the heart of the community. The beauty of a facility like that is we’d only use it for two or three hours in a morning when no-one else wants to use it on weekdays. The rest of the time it would be there for community use.
“We’d have two or three 3G pitches there and local teams who struggle to get pitches at the moment would have that facility available, we’d have our military veterans team, our ladies’ teams, disabled football teams – it would just give us a whole base to be able to do what we want to do.
“Within that we’d have a gym and our own education programmes, so BTEC courses to sit below our Academy with the pitches to use in the afternoons. There’d be lounge areas, cafes, social events going on – we’d be able to replicate everything we do in the community from the stadium at the minute and pretty much replicate it and double it overnight, putting £4m/£5m worth of social value into the community.
“Just because we have the training facility there for the first team and the Academy it makes the club sustainable as well. Hiring out one 3G pitch can generate £100,000 a year. I don’t think people realise just how transformative the finances for the club it would be. We need the council and developers to work together to make it happen.
“The council’s input is so important. The football club brings a lot of value to the community via the Community Trust and has provided many positive stories from a town that has had its share of negative press.
“We were on TV recently for our One-Stop bus, the food pantry, so I think we bring a positive message for the town. We bring value to the town and it’s important the council get behind us and assist us.
“There is a site we have in mind and we’ve been approached by a local developer to develop the community hub – but it does require us to have the finances to make that happen and it would require council support.
“But there couldn’t be anything bigger long-term to make the club sustainable and make sure there’s a club still here in 100 years’ time. It’s really important it happens.”
Gauge on criticism of the board
“I think some of it’s fair if you look at it without context. But the board took over as a bunch of volunteers at a difficult time for the club, and we then faced all sorts of challenges with legal action and various things with the EFL.
“Perhaps part of the criticism is that we’ve relied too heavily on managers to get things right on the pitch. But I can tell you now, with the hours I put in as a volunteer, there isn’t much time to do much more!
“This board was thrown together and the club was in a pretty bad way – we couldn’t even get any accounts of where we were, there was a rough cashflow forecast which wasn’t looking particularly great, but we couldn’t see how much money the shop made, how much money the bar made and so most of the sorting out we had to do was behind the scenes to get the club running as efficiently as it is now.
“Commercially we can get much better but, if you come in the club now there’s people in it all the time, business meetings going on, there was an NHS blood donor set up in the Ratcliffe last week, things going on in the lounges in the evening, so it is becoming the heart of the community which is what we want it to be. But it takes a bit of time to build that.
“I think you get judged as a board by what happens on the pitch, and it’s not been very good on the pitch, I think everybody recognises that.
“But now that we have got all of that legal stuff out of the way we are starting to concentrate more on those matters on the pitch and get involved rather than just trust the manager – though I have to say Jim Bentley very much wants a collaborative approach to recruitment, players we get in and long-term sustainability for the club in terms of sales and things like that.
“I think, ultimately, if you start winning on the pitch, things improve. But the reality is, with the size of our club, we are always going to be in the bottom few clubs in terms of budgets.
“We’ve increased our budget this year on players but we are still in the bottom six or seven in the league and many teams we play have in excess of £1m more in their playing budget than us.
“So we’re always going to be up against it but that doesn’t mean we can’t succeed at this level.”
