TUFC takeover bid - Gaming International Ltd

I DON'T BELIEVE IT!

We were out for lunch today at the 7 Stars and there was a large group of people on a table near us who we overheard talking about TUFC being dissolved by the end of December. Can anyone tell us if there is any truth in what we heard because the TUST released a statement about their meeting that seemed reasonable and now we have heard this. Does this mean that developers would get Plainmoor if the club doesn't pay its debts and is dissolved? If anyone can shed some light on this we would all appreciate it as we are all supporters of the club.

I think this conversation relates to the GI loan which has to be paid back by January and is detailed in the latest TUST email as set out below:


Update to TUST Members following meeting with the Torquay United Board

A meeting took place between the boards of Torquay United and TUST on 25th August at Plainmoor. The meeting was initiated in order to gain some clarity on the current financial position at the club and at the same time to further build relationships between us.

We would like to take the opportunity to thank David Phillips, Mervyn Balson, Harry Kerswell and Rob Stanley for their honesty with respect to the questions posed which were answered in detail as and where they could be.

The board have confirmed they are actively seeking new investment into the club. They are open minded as to what shape this investment comes, but it is clear that a capital injection is required over the next 6 months in order to meet liabilities falling due for repayment. Furthermore, the board articulated their rationale for exploring a move away from Plainmoor in order to provide for the longer term financial stability of the club.

Why move away from Plainmoor?

According to the club board, the facts of the matter are that as an enterprise the current ground and facilities do not offer the opportunity for the club to exploit commercial opportunities in the same way that a new stadium could. There are undoubtedly additional revenue streams that could potentially be considered, but their impact on the cash flow position is likely to be a drop in the ocean against the numbers the club believe are required in order to ensure long term financial stability.

The club board outlined draft plans they have put together for a new stadium at Nightingale Park which would consist of the stadium itself, 2 training pitches and Car Parking facilities. The club would look at other commercial outlets incorporated in the stadium such as restaurants, bars etc. which would also be open during non-match days and accessible from outside the stadium. It must be stressed of course that agreement from the council would need to be reached in order for such plans to come to fruition.

The training pitches would be 3G and as such would be an income generator whereas the stadium would be a grass pitch which would not inhibit a return to the Football League. The club board believe there are a wide array of income earning opportunities from such a structure which would provide the level of additional cash flow required to provide the financial stability required.

All sounds ideal, but how would this be purchased?

The club board believe that a developer would finance the work required and retain certain aspects of Nightingale Park for their own interests. The club would be granted the freehold to the stadium, Car Parking and Training Pitches in exchange for a move away from Plainmoor where the current ground would be used as a vehicle in the overall business proposition agreed by the Council, which is likely to involve a package of sites. The club board have discussed their ideas with certain council parties and believe the Council would besupportive. They believe that Torbay Council view the existence of Torquay United as being vital to the area and hence this is a key element of the support together with the need to redevelop the Nightingale Park site.

What if the vision does not work out?

The vision of a new ground is great in principle, but there is a lot of work to get to that point. Firstly, the club have to identify a developer who is interested in the proposition. We were advised at the meeting that following the collapse of the Gaming International deal, the club were in discussions with another company at present. Talks were progressing, but the club stressed it is also in talks with a number of other interested parties at present and no exclusivity period had been granted to any one party.

Secondly, any such move is likely to take several years to come to fruition. Given the precarious financial position at the club; the board made it clear that incorporated into any takeover/ development deal would be a financing package that would provide a certain amount of working capital to see the club through to the anticipated move date.

The TUST team in attendance (the TUST Chairman was not able to attend because of holiday) outlined their concerns should any deal fall apart. The club board were quick to confirm that any deal would provide for the club to remain at Plainmoor until such time as the new development was completed and ready to be handed over. If for any reason this did not happen as planned then Torquay United would remain at Plainmoor and hence “on the field” activities would not be affected in their view.

What other options exist? Community Ownership?

Whilst the move to a new stadium appears a possibility given the provision of additional information at our meeting, there are still many hurdles to overcome. In the short term there is a requirement for additional working capital and help both on and off the pitch. Kevin Nicholson’s budget for the 2016/17 season includes a figure associated with the Players’ Fund. The exact breakdown was not divulged, but Rob Stanley (Club Secretary) was keen to stress that all donations to the fund are “ring-fenced” solely for the purposes of the playing budget. Fans are therefore urged to continue making donations to this fund. TUST representatives highlighted the need for the fund to have greater transparency in terms of its’ value and recognition for those donating. Rob was currently working on this and will attempt to use the big screen at Plainmoor on match days as a way of updating supporters. The club were also looking at alternative ways of improving the donation process.

The club board recognised the issues they have encountered and mistakes made in respect of the failed Gaming International deal. That said, they appear to be far more aware of their need for detailed due diligence with any 3rd party in the future. It would appear unlikely that Gaming International are to re-enter the picture again in respect of a takeover. That said, the club are aware of the need to repay an outstanding loan to GI which is due to be repaid by January 2017. In the absence of this deadline being met, it is not yet clear to TUST what GI’s actual response would be.

As a positive move in the eyes of TUST, the club board have agreed in principle to the re-commencement of a process to investigate the possibility of Community Ownership again. It must be stressed that at this stage the club wish to keep all of their options open, but they are beginning to acknowledge the potential benefits that Community Ownership can bring. With time being very much of the essence, we are minded to re-open talks with Supporters Direct to undertake the first step in this process. This is a significant step forward. However before next steps are determined the full TUST Board will need to meet to discuss the best way forward.

Supporter engagement

The club recognise the need for greater engagement with supporters. Part of the rationale for a perceived lack of engagement revolves around the lack of resources at TQ1. The club board confirmed there are only 3 full-time staff two part time staff at the club outside of the playing structure. They would welcome volunteers to assist them with just about all activities at the club. Harry Kerswell specifically spoke around the need for assistance to be given to the groundsman if any supporters could help.

TUST have highlighted how Community Ownership can open up a “gateway” to accessing skills from much of our supporter base who are likely to feel differently about offering time and money to a community owned club. A suggestion was put forward to form a “working party” aimed at pulling on the strengths of those willing to assist the club moving forward. This was seen as gaining particular traction should the Community Ownership route start to come to the fore. A “working party” seemed more of a productive route to take than a “Fans Forum”. David Phillips did however recognise the need to facilitate a fans forum in the near future as promised. However, in the short term it was felt this may not be as fruitful an exercise as anticipated. TUST would support this view.

Conclusion

Today’s meeting was seen as a big step forward in terms of relationships between the club and TUST. There is a need for TUST to be a “critical friend” of the club, but it is important that we are all on the same page. At the end of the day we all want the same thing as supporters of Torquay United.

Aside from the commencement of a Community Ownership study, the board have agreed to monthly meetings with representatives from TUST from this point forward and will endeavour to be as open as they can with financial matters at the club. On it’s part, TUST will endeavour to support the club with on-going initiatives as far as possible.

Next Steps

At the meeting the TUFC Board outlined some information which they believe is commercially sensitive. TUST Board members were asked to keep this information confidential. In recognition of the current financial position, the TUST Board agreed at this stage to comply with the club's request. The TUST Board also agreed to share this note with the TUFC Board before circulating it to TUST members to respect confidentiality.

In the light of the discussions with TUFC, the TUST Board will meet shortly to discuss the best way forward. We will advise all members of our recommended next steps in due course.

Matt Gorman

TUST Treasurer