Sheepshanks: I may quit
IPSWICH chairman David Sheepshanks today admitted he could be forced to quit the ailing club.His frank confession came as Town's debt spiralled towards the £50million mark – a figure that will stun supporters.
By Mel Henderson
IPSWICH chairman David Sheepshanks today admitted he could be forced to quit the ailing club.
His frank confession came as Town's debt spiralled towards the £50million mark – a figure that will stun supporters.
Sheepshanks and his fellow directors were forced to apply to the High Court on Monday of last week for an administration order.
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But if that fails Sheepshanks, who took over as chairman in 1995, accepts it will be the beginning of the end for him and his boardroom colleagues.
Asked what would happen if the club's creditors refused to agree to the CVA, Sheepshanks said: "Then the club goes into a deeper administration and it would probably involve a disposal of the assets, like a Leicester situation.
"It would probably mean that the existing structure of the club would be broken up, the existing shareholders would lose their entitlement and I'd be gone, the board would be gone and somebody would have to create a new company to build it up."
But Sheepshanks still believes he can stay in control, adding: "I think from everybody's point of view that if that happened unsecured creditors would be very unlikely to receive a bean and furthermore even secured creditors might get less.
"I'm not taking anything for granted, I'm just saying that it is unlikely."
Town's latest accounts, to June 30 2002, showed the net debt to be £31.4m.
But despite player sales, cutbacks and various cost-saving measures being put in place, they have been unable to stop the figure climbing steadily.
Sheepshanks said in his annual report, published three months ago, that the club's economy had been stabilised, but he was forced to admit defeat and plunge the club into administration.
Now the administrators, Nick Dargan and Nick Edwards of Deloitte & Touche, are busy assessing the situation before deciding what action must be taken.
Income received from the sales of Titus Bramble to Newcastle, Marcus Stewart to Sunderland and Jamie Clapham to Birmingham has been swallowed up by week-to-week operating costs.
The club's wage bill, which doubled to £17.6m in 2001, was a staggering £24.1m last year.
Eighteen club employees were made redundant, at an estimated annual saving of £500,000, and a number of young players released.
But it is the sky-high salaries of the first team squad, awarded via lucrative long-term contracts, that continue to cripple the club.
Finidi George and record buy Matteo Sereni, the £5m Italian goalkeeper currently on loan at Brescia, are both on £20,000-plus per week.
And the majority of the club's senior stars are pocketing upwards of £10,000 per week.
Summer sales are inevitable, particularly if Town miss out on a play-off place or finish in the top six but fail to win promotion back to the Premiership.
Town's bank overdraft, other bank loans and cash still owed for the purchase of players during a £15m spending spree in the summer of 2001 are also helping to push the figure upwards.
A £25m bond, secured on ticket sales and used to redevelop the stadium, is another major debt.
It has been referred to as a mortgage, with annual interest at more than £2million a year. The money is repayable over 25 years, with capital repayments not due to commence until September 2004.