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Sir John Harman, former leader of Kirklees Council and former chairman of Kirklees Stadium Development Ltd, has issued a statement ahead of a Kirklees Council Cabinet meeting which will look at options for the future management of the John Smith’s Stadium.
Sir John and former Town chairman Graham Leslie CBE were the combined driving force behind the creation of the stadium three decades ago. Here is Sir John’s statement in full.
Kirklees’ Cabinet meeting on Wednesday December 21 is asked to consider the options for restructuring the way in which the stadium is operated.
As the only person who has had continued involvement with this project from its beginning until a couple of months ago, when I left the KSDL Board, I read the report with interest.
Among other things it says: “Some decisions taken in respect of the stadium, at its formation and more recently were, with hindsight, not in the best interests of KSDL or of the council.”
Well, yes and no. The operating agreement set up in 1993 to protect the interests of the two clubs and the ratepayers of Kirklees delivered something that the borough could be proud of and which guaranteed the clubs a stadium which neither could conceivably have created from its own resources; and it served well for a quarter of a century.
It didn’t assume that the parties would always be in agreement, but it did create a structure in which the solutions to commercial challenges could be negotiated round the board table. And when the clubs faced financial meltdown – as each has done – their home was never at risk.
What the agreement didn’t do was ensure that the rent paid by the clubs would always meet costs. In setting a realistic and affordable rent and allowing it to increase year on year by at most the headline rate of inflation, it was designed to ensure adequate funds to manage the site, and that’s what it did for many years.
The instalments on the initial borrowing were paid on time, protecting the original council guarantee, and pitch replacement and general maintenance were dealt with.
But faced with rising costs as the facility required more capital replacement, and latterly of course with the spike in energy bills, the clubs’ rent payments no longer cover costs, as the Cabinet report points out.
The solution is obvious, which is to come to a new operating agreement. It’s been obvious for at least five years and my successors as chairs of KSDL, Andrew Harrison and Paul Kemp, have put endless hours into trying to negotiate one.
But the will to find common solutions has gone. I do not see much evidence that negotiations are progressing though, of course, I may be wrong.
It is a sorry state of affairs and I fervently hope that the council and the clubs can find a way forward. But I’d also say to each of them – be careful what you wish for.
For the football club to think that it will be able to run the place with less cost than its currently low rent, while at the same time taking on the longer term responsibility for the building, seems fanciful; there are clubs who envy HTAFC’s luck in having the asset liabilities completely separated from playing costs.
For the council to think that surrendering its shares will protect it from future financial entanglement with the club is a nice idea but goes against experience (Coventry, Doncaster, Leeds, anyone……?)
And for the Giants, is being tenant without a shareholding even a practical option?
The Cabinet report is dead right when it says this: stalemate equals disaster. A new structure has to be agreed soon – and I mean by the summer of 2023 at the latest.
That might be possible, but it isn’t certain. There is one option not being put to the Cabinet; whatever its faults, amend the existing rental agreement to meet the real cashflow needs of running the stadium. It might yet be the best – or the least worst – solution.
