Where’s the Money Gone: St Andrew’s

The second article in my series looking at where Birmingham City have spent money in recent years focuses on St Andrew’s stadium. The stadium has been the centre of news throughout most of the current regime’s tenure due to the sale of the stadium to Birmingham City Stadium Ltd to get around P&S rules; the closure and partial reopening of the Tilton and Kop stands due to structural issues and the ground share deal with Coventry City FC.

St Andrew's taken 26 December 2018

On my last visit to St Andrews to watch the match against Blackpool FC I couldn’t help but notice that St Andrew’s is looking a little unloved. Notwithstanding the closure of the bottom parts of both the Tilton and the Kop, there are obvious signs that the investment into both the ground and the matchday experience does not appear to be there.

While things like advertisements on the wall which are eight years out of date and the broken flags being held by the honour guard (for the first time since the start of the pandemic) are very minor, it all adds to the feeling that there isn’t much care from the powers that be about how the club looks.

Using information I have come into in the last few months plus stuff from the public domain, I’ve put together this article examining just what has gone wrong.

Back in June 2019, it was reported that due to talks between Coventry City’ FCs owners and Wasps RFC (owners of what was then named the Ricoh Arena) breaking down, Coventry City would have to play the 2019-20 season at St Andrew’s as part of a groundsharing agreement.

While some Blues fans were happy with the agreement as they saw it as helping another football team out, many were not. It was felt that the additional games played on the St Andrew’s surface would make it harder for ground staff to maintain, and there were fears of how much money Blues would actually make from the deal due to the ground not being owned by the club itself.

I have obtained a draft copy of a contract between Blues and Coventry City FC’s owners which throws some light on this situation and confirms what money Blues were to make from the deal.

Otium Entertainment Contract Page

The first thing to note is that the deal was signed between Birmingham City Football Club plc and Otium Entertainment (Coventry City FC’s owners) rather than Birmingham City Stadium Ltd. This means payments from the deal came directly to the club rather than the stadium company, ruling out the thought Blues were bypassed in this deal.

Ren Annotation

I must stress that this is a draft copy and remains unsigned; however the only annotations I can see which indicated amendments from Blues’ side was the misspelling of former Blues CEO Ren Xuandong’s name, which indicates to me that this is likely close to the final contract that was signed between the two parties.

Facility Fee

Interestingly, the facility fee charged was charged on a per game basis rather than a per year basis. This meant if Coventry City played more home games than expected (say a cup run), then Blues would benefit.

Kiosk Fee

There was also a 30% charge on all food and beverage turnover from first team games Coventry City played at St Andrews.

Using the fixture calendar from the 2019-20 and 2020-21 seasons, we can work out how much of a facility fee Coventry City paid.

In the 2019-20 season, Coventry City played 18 home games in League One at St Andrew’s, costing them 18 x £50,000 = £900,000. The curtailment of the League One season due to Coronavirus meant the last five home fixtures weren’t played at St Andrew’s, costing Blues £250,000.

In addition, Coventry City played one home game in the second round of the FA Cup along with a third round replay and fourth round replay and the first round of the EFL Cup at St Andrew’s. The two Checkatrade Trophy games played at St Andrew’s were given free of charge. The total for cup games thus comes to £150,000, meaning in total for the 2019-20 season Blues received £1,050,000.

In the 2020-21 season, Coventry City played 23 home games in the Championship at St Andrew’s, costing a total of £1,150,000. As all of their cup games were drawn away there was no facility fee from those – and as all games were behind closed doors, there would be no turnover from the kiosks.

That means the total amount of facility fee Blues received from the two seasons at St Andrew’s was £2.2M.

Ground Sale

Over the same two-year period, according to the accounts Blues had to pay Birmingham City Stadium Ltd £2.5M in rent. While BCSL was a subsidiary of BSH this could have been seen as a mere paper transaction, but as of May 29, 2021 the Stadium is now owned by Achiever Global Group and Oriental Rainbow Investments, which would on the surface indicate that actual money has to be paid.

Bearing this in mind, it’s entirely possible Blues lost money on the whole groundshare deal, despite negotiating a deal which wasn’t that much better than the one Coventry already had at what was then the Ricoh Stadium.

When I got home last Saturday, I reflected on my thought about St Andrew’s. Right now my feelings towards the club aren’t the greatest, and the cold weather and less than thrilling match hadn’t helped my mood much.

I’m well aware that now I’m middle-aged, I’ve got a bit more crotchety than I used to be, and I did wonder if my feelings were biased by my growing jaded feelings about the whole matchday experience.

To find out more, I reached out on Blues messageboard smallheathalliance.com as well as Facebook and Twitter to fans to ask their opinion of what they thought about the ground and how important it was to their matchday experience.

I got a lot of replies, with most saying the same thing – that it was obvious the little touches were being ignored and it was making the ground a less appealing place to visit.

I reached out to Dale Moon at the club to ask him to look through the threads of replies and to reply with any comment Blues wished to make officially. I have yet to receive a response; whether this is because there is no response or because they don’t want to talk to me I do not know.

However, there are things in the public domain which to me indicate the feeling of the club and the owners towards those problems.

As part of their financial reporting duties, Birmingham Sports Holdings are duty bound to publish an Enviromental, Social and Governance Report (ESG Report) every year along with their financial results.

ESG Report

Most of the ESG report appears to be a box ticking exercise to me, but on Page 7 there is a “materiality matrix” that shows the importance of various factors on the group.

While all factors are in the “High Priority” quartile of the graph, the least important items stand out to me – “Community Investment” and “Talent Attraction and Retention”, which I think says a lot about BSH as a company.

However, I also have to consider how much I believe the graph, bearing in mind the item of utmost importance to the company is “anti-corruption”.

What I didn’t notice anywhere in the ESG report (or in the annual report for that matter) was anything about contingencies regarding the repair of the stadium.

Having been tersely told by BSH’s company secretary Robert Yam Piu Hung to wait for company announcements when I last enquired as a shareholder, this lack of reporting surprised me – as has his lack of response to my question regarding this.

The only real response to supporters we have is from the minutes from the last supporters forum, which took place on August 3, 2020. There is a copy of this on the Blues Trust website which I have referenced.

Fans were told that the Gil Merrick was undergoing painting and maintenance then, and that while flags and signs had replaced on the front of the Kop stand, panels at the front were to be repainted and the replacement of windows woud be looked into.

However official those minutes are, it’s difficult to know what to believe. This was the meeting that Blues Chief Operating Officer Lungi Macebo told supporters the upper parts of the Kop and Tilton would be ready in August, and that the whole stadium would be complete by the end of May 2022.

We know the upper parts was complete hogwash, and now from speaking to contacts I have it appears the bit about the lower parts was fantasy too.

As it stands, I’m told the work on the lower parts of the Kop and Tilton stand won’t even start until the season ends… and that due to the lack of seats sold while the ground is a reduced capacity it’s even possible that the repairs could be delayed for longer as there is no point adding more seats which cannot be sold.

This to me is absolutely idiotic thinking and is the start of a vicious circle. I’m sure there are fans who don’t go because the seats they want aren’t there, and this is why the ground looks emptier than usual. The longer that carries on, the more people will decide against it, causing the owners to see even less reason for investment.

The worst bit is it doesn’t even need to cost that much money.

I’ve managed to obtain a copy of the budget for repairs and refurbishment during summer 2019 and the amount budgeted was just £37,415 – just over a week’s basic wage for Cheick Ndoye two seasons before.

St Andrew's Repair Budget

What’s really desperate is that the structural repair budget for the stadium from that total budget was just £300.

I’ve not managed to get an answer from the club yet about exactly what is wrong with the Kop or Tilton stands but I’m very much of the belief it’s something that has happened over a period of time.

If the budget for repairs was just £300 in the summer of 2019, I think there are questions to be answered about exactly what was reported – and just how much of a problem was kicked down the road.

I think the problems concerning stadium upkeep goes beyond money too.

Take for example the 8-year-old advertisments in the Gil Merrick Lower. How much time would it take someone in marketing to knock up an A4 flyer for something the club is doing, and go round and replace them on a monthly basis?

Is it a lack of initiative to do things like this, or is morale that bad people just don’t want to do anything more than what is considered the bare minimum? Where is the leadership from the current senior management team to spot these little issues and come up with simple fixes just to help things look a little better?

I appreciate this piece is long and a bit ranty, but the truth is that the state of the ground worries me as an analogy for the state of the club.

The complete lack of care and investment says to me that the people in charge just don’t care about the club; that as long as it’s doing okay in the league and people are buying tickets nothing else matters.

In the short term that thinking is okay but the longer term is a different story; people are beginning to drift away and it’s going to be hard to get them back. Worse, we’re in danger of losing a generation of Blues fans.

I was a kid in the 80’s, and the football violence was a major factor in stopping my dad (who to be fair had no interest in football) from ever taking me to watch Blues. As a parent now, would I want to go through the rigmarole of taking a kid to the game knowing that it’s not a great experience, or would I just let them stay home so I didn’t have to listen to them complain?

Furthermore, as the club no longer owns the stadium, is there now a lack of appetite to do anything to a place they could potentially lose?

I’m not convinced Blues are going to move any time soon either as the current situation is a nice easy way to get a million or so a year out of the club into a couple of entities based in a tax haven where it’s almost impossible to know anything more about those companies.

The problem we have as fans is that some issues have been going on so long at the ground we can’t be bothered to complain. That’s only going to extend and potentially worsen the current status quo.