What a surprise. Wembley Stadium (remember that?) nearly brought English football to its knees when it was revealed that the problems surrounding the stadium brought its operating company to the brink of a collapse that would have dragged the FA down with it, according to the FA’s latest accounts.
The FA has warned its shareholders that the risk will not be fully averted until after the 90,000-seat venue is fully operational.
The Guardian have reported that English football came within a whisker of disaster, which is shown by the FA’s accounts for the 12 months to last December, which "lay bare the precariousness of Wembley National Stadium Limited (WNSL), a wholly owned subsidiary of English football’s governing body." It got so serious that the auditor, Deloitte & Touche, refused to sign off the stadium company as a going concern.
Amongst all the financial jargon, it basically says that if the WNSL collapsed a £25m "financial support package" would be owing from the FA to the failed company’s creditors, with a further £23m "support agreement" which could have crippled an organisation already £276m in debt over the project.
Importantly for the FA, a deal struck in October, a fortnight after the FA audit with the stadium constructor Multiplex, ensured that the new Wembley will be open for the 2007 FA Cup final. I think fans won’t be holding their breath however. The new national stadium is without doubt the biggest farce in football (including Newcastle and West Ham) which has seen countless delays for the £757m error. With that, WNSL faced three major predicaments. Firstly, the numerous delays caused a huge repayment to creditors of £61.4m to be missed. Sam Allardyce could buy sixty squads with that money. Secondly, Multiplex was pursuing WNSL for £150m in legal claims and lastly, the possibilty that Wembley’s construction might be held up even further.
The FA’s accounts reveal that the worst-case-scenario opening date for Wembley, as agreed with the consortium of lenders headed by Barclays, was September 30 this year. Now, we all know that is long passed, and now, a staggering 22 months after the scheduled opening of January 2005, the WNSL has breached the terms of its bank loans. what does that mean? Well, if you’re late on a payment to the bank, they fine you don’t they? So, with the shambolic situation getting worse, and Multiplex failing to deliver on schedule, the FA was forced to beg for more time to make its first repayment. It’s fair enough if you’re just a bloke on the street, but for the a company that’s been a football association longer than anyone else? A joke.
In the notes to the accounts, which were signed off by the FA’s director of corporate affairs Simon Johnson, is the following statement: "One of the consequences of the contractor’s continuing delay is that the stadium was not open by September 30 2006, which was a condition of WNSL’s banking facilities and covenants. This has required WNSL to renegotiate its banking facilities and covenants, specifically rescheduling its first mandatory loan repayment to March 31 2007, which the directors of WNSL believe, based on current discussions with the contractor, is achievable for operational completion."
If you’ve read that and are none the wiser, it basically means that we missed the first payment, and have to pay around £33million in interest. The second problem facing WNSL, the £150m in claims from Multiplex over what the Australian builder considered to be ad hoc changes in the design specifications for which its client was responsible, could have nobbled both the Wembley group and the FA. WNSL may well have gone under if those claims had gone against it or – with Multiplex refusing to hand over the keys to the venue before all outstanding issues were satisfied – if it had suffered yet more months’ delays in expensive legal process. On October 19 the FA announced that settlement had been reached ensuring it would pay Multiplex £36m more provided a serviceable stadium was handed over in time for the 2007 FA Cup final. What are the chances of that eh? Slim to sweet FA I reckon. [Mof Gimmers]