BCFC: Regime Change

Birmingham City slumped to a 4-0 defeat on Saturday at Blackburn Rovers, leaving them 17th in the table. While the heavy defeat has brought out some critics of Lee Bowyer’s tenure as Head Coach, there has also been an increasing amount of talk online about how the ownership of the club might change.

St Andrew's taken 26 December 2018

Although there have been some bright spots this season, the mood around fans online seems to have become more despondent as it’s become clearer that Bowyer will have to move on players to have any hope of bringing some in.

The Blues Head Coach has already confirmed that club skipper Harlee Dean has been made available for transfer due to the high wages Dean is on coupled with his lack of playing time, and it almost seems inevitable that reasonable offers for any player could well be considered.

There has been some musings online that this is the owners getting the club ready for a sale – but is this something reasonable to expect?

Are Blues officially being sold?

The simple answer to this question is no. While there may be whispered talk online of a deal being done behind the scenes, the simple fact is that if Birmingham Sports Holdings had come to an agreement with any purchaser, then they are duty bound to report that to the Hong Kong Stock Exchange.

When Vong Pech bought 21.64% of Birmingham City plc from BSH last year, BSH had to make an announcement that they had come to a conditional sale and purchase agreement with the Chinese-Cambodian businessman.

That announcement confirmed the basic terms of the deal, with a circular to follow within a month announcing an Extraordinary General Meeting so that it could be approved by shareholders. The whole process of the partial sale of the club took a couple of months from the original announcement on October 8 to the confirmation following the EGM on December 31.

If BSH wished to sell a stake of any substantial size in the club, then they would be forced to repeat this process due to the size of the transaction in relation to the size of BSH.

What that means is even if BSH announced a deal to sell the club to a consortium today, it could not be approved before the end of February at the earliest, and as such it would be too late for an injection of funds during the transfer window.

Of course, as a private British Virgin Islands company Oriental Rainbow Investments would not have to go through this rigmarole; they can sell their 21.64% stake without reporting it publicly. However, the EFL would potentially have to be notified and any purchaser would potentially face the Owners and Directors Test.

Are BSH Unofficially Negotiating With Any Potential Bidders?

This is an incredibly hard question to answer, because unlike the previous one I have to go to what I know rather than publicly citable information. With this in mind, I feel it’s only right to remind readers all speculative information (including info from me) should be treated with scepticism and it’s down to the individual reader to believe what they think is true.

While I can’t claim to know everything that is going on, in the last few months I’ve become aware of at least three potential bidders for the club. I can’t say that I know of the people involved as I’ve had the information hidden from me by the people I have spoken to, but all of them claim that they have the funds in place and want to buy the club and stadium lock, stock and barrel.

That being said, it’s one thing for someone to say that they are interested in buying the club and them actually completing the process.

One of the chief problems that I have witnessed in the last ten years of writing this site and Often Partisan is that while there are always groups of people interested in buying the club, actually getting hold of someone who has the authority to negotiate the deal can be complex.

In the time of Carson Yeung I can remember Peter Pannu, Vico Hui and Sammy Yu all telling interested groups that they had authority to negotiate on Yeung’s behalf – but I’m fairly sure none of them had that in practice.

That made it incredibly difficult for anyone to actually try to buy the club, and it was only when BSH was placed into Receivership that the process was moved forward. The Receivers were able to act publicly with authority, making the process of submitting a bid a lot simpler.

While there are no current figures connected with BSH as public as the aforementioned Pannu or Yu, from the little I’ve seen there remain the same problems of actually getting in touch with someone who can negotiate.

The chief part of the problem I’ve seen is the fact that to buy all of the club and the stadium then there is more than just BSH to negotiate with. While contact details for BSH are a matter of public record, getting hold of Vong Pech or Kang Ming-Ming (or their representatives) is a somewhat more difficult problem to deal with.

Of course, with one person linking both Vong Pech and Kang (as well as other shareholders in BSH) one might think the obvious solution would be to contact them; the problem being there is that I don’t refer to him as the “elusive Mr King” without reason.

That difficulty to even negotiate makes the process much more complicated and I believe is a factor which is turning off groups from making anything more than an enquiry. Most groups get involved because from the outside Blues look a good proposition to pick up and flip; once it gets down to the nitty gritty it becomes obvious that is not the case and interest fades.

Do BSH or Mr King Even Want To Sell?

Again, this is a difficult question for me to answer and I’m reliant on information gleaned from non-public sources; but the answer would appear to be that they are not looking to sell right now.

From a financial perspective it’s a standpoint which doesn’t seem to make logical sense due to the losses the club have made and the investment the club needs to be in a position to get promoted.

However, from everything I’ve seen logic doesn’t come into the equation.

It’s a situation I’ve seen replicated not just at other football clubs but in other walks of life; a person or company in any kind of difficulty refusing to let go of the millstone which is drowning them due to reasons of pride and ego that they can “turn it around”.

Remember former CEO Ren Xuandong and his refusal to sack either Steve Cotterill or Aitor Karanka even when it was obvious the club was doomed with them at the helm? It was obvious in the case of Karanka just how much Ren did not want to give the Spaniard his P45 despite what was in front of him – and I think it’s that same feeling of ego that is preventing BSH from even exploring the idea of a sale right now.

I’ve mentioned before that I think Blues would only go into administration as a last resort because of the importance of the club to the listing, and sadly what I think we’re seeing now is costs being stripped to the bone to reduce the amount the club is losing.

The chief cost the club has is player wages, and I don’t think it’s coincidental that wage costs were mentioned as a reason for publicly stating Harlee Dean is available for transfer.

Indeed, I think we’re at a point where any reasonable offer for any player would be considered if it helped to drop the wage bill to a more sustainable level – and it’s a reason why I was surprised that Marc Roberts was offered a new deal bearing in mind he was one of the highest paid players at the club.

I think any would-be bidder who is serious about buying the club needs to get into a position where they can make an offer that cannot be refused, because I think like Xia over the expressway these are only going to sell when there is a metaphorical gun to their heads.

What Can We As Fans Do?

This is the hardest question of all for me, because the truthful answer is I don’t really know what we as a fanbase can do as a whole.

From a personal perspective, I am doing what I think is right in this situation; sharing information about BSH shareholders and people like Mr King I’ve found either publicly online or from the growing number of contacts I’ve built. While I get a lot of it is confusing and difficult to understand, my hope is by sharing information widely more and more people can understand the situation the club finds itself in.

I’ve always thought that the only way things can be brought to a head is by an outside body forcing it, not unlike the suspension of share trading forced on BSH following Peter Pannu’s outburst on Often Partisan.

In practice this would mean that as fans we would need to pressurise regulatory bodies such as the EFL or HKSE to ask deeper and deeper questions of BCFC / BSH until they crack.

How that happens I do not know; only that I cannot do it on my own.