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06 Mar 12
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Karl Oyston explains payment to company owned by his father which provoked outrage among fans and insists he is 'a rebel against the whole way things are done in football'
David Conn guardian.co.uk, Tuesday 6 March 2012 14.54 GMT
Ah, the romance which was Blackpool reaching the Premier League. The tangerine shirts, the tower, the nostalgic gust of Stanley Matthews and football in its simpler, 1950s image. Yet amid all that heartwarming sentiment as Ian Holloway's team played manfully and just failed to stay in the billionaires' league, it always seemed last season that Owen Oyston and his family, who own the club, were conspicuously not spending modern football's great promotion windfall, but banking it.
On Friday, published while the chairman, Karl Oyston, Owen's son, was on holiday, came the astonishing, unsentimental, black and white financial record of the Tangerines' single season in the world's richest league. The club's income increased by £42m due to the Premier League's vast TV rights deals, but Karl Oyston kept Blackpool's wage bill to almost the same as in the 2010 Championship promotion season. So fully £32m surplus was recorded, at 17,000-seat Bloomfield Road, which had a temporary stand at one end. And with part of that, the Oystons paid themselves the highest salary, by many millions, ever awarded to a director, even in football's fabulously overpaid executive class. You had to look twice, then again, to make sure you were not seeing too many noughts, before accepting that lovely old Blackpool, now back in the Championship, really did pay a company owned by Owen Oyston a salary of £11,000,000.
That revelation, in a sport only now coming to terms with the century-old reality that the men in charge of "clubs" are not just chairmen, but owners, has prompted open-mouthed outrage. To the tradition of directors being "custodians", the £11m looks like outsized two fingers. Of the fans' reactions, blasting across the internet, the most succinct has been the repeated exclamation: "At least **** Turpin wore a mask!"
Yet Karl Oyston, discussing it while in transit on holiday, was emphatically not apologetic, as he explained the circumstances, which are not quite as straightforward as they appear. To clarify, the £11m was paid not to Owen Oyston personally, but out of Blackpool to a company Oyston Sr owns: Zabaxe. Karl says Owen has not taken the money personally and will not be spending it on indulgences – "He does not lead an extravagant lifestyle."
The reason the money was paid out of the club, rather than sitting in its account as a huge cash surplus, was for tax planning, Karl said. "We have done all this on professional advice. We were advised that if we left the money in the football club it could attract a very large tax bill, which would fall on the football club.
"The money has been paid to my father's company, and if the club needs it for the next stage of development, which is to build a new training ground, I am sure my father will lend it to the club interest-free, as he always has over 25 years of ownership."
Famously determined to keep players' wages below gigantic, and not pay agents if he can help it, Karl says he refused to spend Blackpool's Premier League bonanza on players' wages in an effort to stay up. Blackpool did sign the striker James Beattie and midfielder Andy Reid in January 2011 and Oyston appears disappointed with the impact they made in return for the wages they commanded.
"I am stubborn, I just won't blow the club's money, so we had a big cash surplus," he argues. "If I had spent the £11m on players' wages, nobody would be complaining, but that money would be gone to Ferrari dealers and whatever else players spend it on. So many clubs have fallen into financial trouble by paying players too much – I don't see a massive queue of ex-Portsmouth players lining up at Fratton Park to help Portsmouth now."
He argues that his running of Blackpool – sticking with managers, not serially sacking them, keeping wages affordable but with a £5m bonus incentive to the players for winning promotion, and gradually rebuilding a Bloomfield Road which was partly condemned when he became chairman – is being vindicated. Blackpool's coffers will fill again this year whether the club win promotion or not – they are enjoying the first year of massively increased parachute payments from the Premier League's £3.5bn 2010-13 TV deal: £16m for each of the first two seasons after relegation, £8m for two after that. He does not think, therefore, that in fact the club will need any of the £11m back for the training ground, which he believes will cost around £5m, an upgrade from the ragged Squires Gate site largely unchanged since Matthews ran around on it.
Karl points to his family's ownership of Blackpool as a success story, given that his father, a Blackpool fan, bought the club in 1987 when Bloomfield Road was about to be sold for a supermarket and the club faced extinction. After his father's conviction for rape in 1996, Karl's mother, Vicki, took over as the chairman for dire years at a tumbledown ground. Karl took over in 2000 and Blackpool were immediately relegated to the bottom division. Since then he has clattered the club up to the Premier League, and now back in the upper reaches of the Championship, rebuilt three sides of Bloomfield Road, is currently filling in the south-east corner, and preparing to build the new training ground.
"I'm a rebel against the whole way things are done in football," he says. "Everywhere I go in the boardrooms I hear the same thing: clubs are overspending by £5m on players and agents. Perhaps it is because this is a job I was given by my family, to sort out the mess of the football club; I didn't come into football for some dream."
He says that in 25 years, Owen Oyston put in money in return for shares, although he does not say whether it amounts to £11m. The family loaned substantial money to mop up losses, and contributed to the ground rebuilding, while not taking interest, dividends or large salaries out. He points to other clubs: Birmingham City and Coventry City with investor owners, hit with transfer embargos; Portsmouth and Rangers insolvent, Leicester City, announcing a £15m loss and £27.5m loans from the club's Thai owners, at 8% interest.
"We are not in trouble, like so many other clubs," he says. "I find it perverse: if I'd spent in on players I'd be lauded, but we're being pilloried. The £11m was paid out as part of sound tax planning – we are UK-based and believe in paying our taxes but still have to plan sensibly. I understand, it was paid to Zabaxe as a salary and people will draw the conclusion it is a salary to my father. We could have explained it better. But the money is in an Oyston company; the football club is an Oyston company too, and that money is there should we require it.
"But frankly," he argues, "after the way he has supported the club all these years, if it was an £11m salary to my father, so what?"
David Conn guardian.co.uk, Tuesday 6 March 2012 14.54 GMT
Ah, the romance which was Blackpool reaching the Premier League. The tangerine shirts, the tower, the nostalgic gust of Stanley Matthews and football in its simpler, 1950s image. Yet amid all that heartwarming sentiment as Ian Holloway's team played manfully and just failed to stay in the billionaires' league, it always seemed last season that Owen Oyston and his family, who own the club, were conspicuously not spending modern football's great promotion windfall, but banking it.
On Friday, published while the chairman, Karl Oyston, Owen's son, was on holiday, came the astonishing, unsentimental, black and white financial record of the Tangerines' single season in the world's richest league. The club's income increased by £42m due to the Premier League's vast TV rights deals, but Karl Oyston kept Blackpool's wage bill to almost the same as in the 2010 Championship promotion season. So fully £32m surplus was recorded, at 17,000-seat Bloomfield Road, which had a temporary stand at one end. And with part of that, the Oystons paid themselves the highest salary, by many millions, ever awarded to a director, even in football's fabulously overpaid executive class. You had to look twice, then again, to make sure you were not seeing too many noughts, before accepting that lovely old Blackpool, now back in the Championship, really did pay a company owned by Owen Oyston a salary of £11,000,000.
That revelation, in a sport only now coming to terms with the century-old reality that the men in charge of "clubs" are not just chairmen, but owners, has prompted open-mouthed outrage. To the tradition of directors being "custodians", the £11m looks like outsized two fingers. Of the fans' reactions, blasting across the internet, the most succinct has been the repeated exclamation: "At least **** Turpin wore a mask!"
Yet Karl Oyston, discussing it while in transit on holiday, was emphatically not apologetic, as he explained the circumstances, which are not quite as straightforward as they appear. To clarify, the £11m was paid not to Owen Oyston personally, but out of Blackpool to a company Oyston Sr owns: Zabaxe. Karl says Owen has not taken the money personally and will not be spending it on indulgences – "He does not lead an extravagant lifestyle."
The reason the money was paid out of the club, rather than sitting in its account as a huge cash surplus, was for tax planning, Karl said. "We have done all this on professional advice. We were advised that if we left the money in the football club it could attract a very large tax bill, which would fall on the football club.
"The money has been paid to my father's company, and if the club needs it for the next stage of development, which is to build a new training ground, I am sure my father will lend it to the club interest-free, as he always has over 25 years of ownership."
Famously determined to keep players' wages below gigantic, and not pay agents if he can help it, Karl says he refused to spend Blackpool's Premier League bonanza on players' wages in an effort to stay up. Blackpool did sign the striker James Beattie and midfielder Andy Reid in January 2011 and Oyston appears disappointed with the impact they made in return for the wages they commanded.
"I am stubborn, I just won't blow the club's money, so we had a big cash surplus," he argues. "If I had spent the £11m on players' wages, nobody would be complaining, but that money would be gone to Ferrari dealers and whatever else players spend it on. So many clubs have fallen into financial trouble by paying players too much – I don't see a massive queue of ex-Portsmouth players lining up at Fratton Park to help Portsmouth now."
He argues that his running of Blackpool – sticking with managers, not serially sacking them, keeping wages affordable but with a £5m bonus incentive to the players for winning promotion, and gradually rebuilding a Bloomfield Road which was partly condemned when he became chairman – is being vindicated. Blackpool's coffers will fill again this year whether the club win promotion or not – they are enjoying the first year of massively increased parachute payments from the Premier League's £3.5bn 2010-13 TV deal: £16m for each of the first two seasons after relegation, £8m for two after that. He does not think, therefore, that in fact the club will need any of the £11m back for the training ground, which he believes will cost around £5m, an upgrade from the ragged Squires Gate site largely unchanged since Matthews ran around on it.
Karl points to his family's ownership of Blackpool as a success story, given that his father, a Blackpool fan, bought the club in 1987 when Bloomfield Road was about to be sold for a supermarket and the club faced extinction. After his father's conviction for rape in 1996, Karl's mother, Vicki, took over as the chairman for dire years at a tumbledown ground. Karl took over in 2000 and Blackpool were immediately relegated to the bottom division. Since then he has clattered the club up to the Premier League, and now back in the upper reaches of the Championship, rebuilt three sides of Bloomfield Road, is currently filling in the south-east corner, and preparing to build the new training ground.
"I'm a rebel against the whole way things are done in football," he says. "Everywhere I go in the boardrooms I hear the same thing: clubs are overspending by £5m on players and agents. Perhaps it is because this is a job I was given by my family, to sort out the mess of the football club; I didn't come into football for some dream."
He says that in 25 years, Owen Oyston put in money in return for shares, although he does not say whether it amounts to £11m. The family loaned substantial money to mop up losses, and contributed to the ground rebuilding, while not taking interest, dividends or large salaries out. He points to other clubs: Birmingham City and Coventry City with investor owners, hit with transfer embargos; Portsmouth and Rangers insolvent, Leicester City, announcing a £15m loss and £27.5m loans from the club's Thai owners, at 8% interest.
"We are not in trouble, like so many other clubs," he says. "I find it perverse: if I'd spent in on players I'd be lauded, but we're being pilloried. The £11m was paid out as part of sound tax planning – we are UK-based and believe in paying our taxes but still have to plan sensibly. I understand, it was paid to Zabaxe as a salary and people will draw the conclusion it is a salary to my father. We could have explained it better. But the money is in an Oyston company; the football club is an Oyston company too, and that money is there should we require it.
"But frankly," he argues, "after the way he has supported the club all these years, if it was an £11m salary to my father, so what?"
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Replies: 6
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is the implication that if he'd paid his team more in the season they were in the prem they'd have tried harder to stay up?
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should have just opened an account for his dog and paid it into that, then everyone would be on here defending him
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I'd take a chairman building new stands and a new training ground over a couple of big signings any day.
In the long term if Blackpool manage to get promotion in the next few years they will be in much better position. |
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What a bunch of whingers. What is wrong with the owner of a business taking a windfall when profits are being made?
Never heard anyone complain when a club owner loses money. |
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I've never really understood why they have the parachute payment system. Strikes me that it simply encourages promotes clubs to spend beyond their means.
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^ surely it is to allow clubs to offload or pay the higher wages players demand in the top tier ?
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