Club Profile: In Focus

Rotherham United FC

A New Dawn

By Tom Whitworth (Issue 49)

The heavy blow of a second administration in two years may well have signalled the end for Rotherham United. A fine small town club, so important to its people, almost disappeared from sight in 2008. But now, thanks to the generosity of a local businessman and the sensible approach to spending adopted by the Millers’ board, a healthy outlook seems assured for the League Two outfit. A considered and realistic strategy is in place to rise through the divisions, while plans to end their costly exile in Sheffield for home games are in place.

“Since Tony Stewart took over as Chairman in 2008 he has supported this football club financially,” says Paul Douglas, the passionate Chief Executive Officer of United. “At the moment we are in League Two because we deserve to be. But for a town of our size we believe we are underachieving. We don’t think we should be in this division. Tony has spent a lot of his money to make sure the club can compete effectively and we aim to be higher than we are.”

Stewart brought the struggling club out of administration two summers ago, a situation they had been in since March that year, costing them ten points and a League Two play-off position. The millionaire bought the club, became Chairman and immediately pledged substantial funding: first to save, then to steady the Millers. To date he has written off “significant investments” and provided further amounts through loans and sponsorship from his local lighting business. (ASD employs 170 people in the town.) “He has done very well in his business life and comes to this with a big sense of civic duty,” believes Douglas.

“He is proud of the area he lives and works in and wanted to use the wealth he has created to improve the fortunes of this football club. Without Tony, we would not be able to afford the quality of the squad we currently have. Certainly not on the revenues we have.”

Though while the club benefits greatly from Stewart’s generous hand, Douglas and the rest of the board are conscious that finances must be carefully managed. The Chairman’s input is necessary, Douglas acknowledges, though not limitless. “The model we are working towards is one of sustainability,” he says.

“We are aware of the club’s recent history [administration in 2006 and 2008] and will not get into the position again where our future is jeopardized. When Tony arrived he brought with him a strong business ethos, which we follow. Our costs are controlled and all revenue streams tapped into as much as possible.

And we try our best to follow the policy of ‘don’t spend a penny more than you bring in’. We are not at all extravagant, silly or wasteful.”

“The model we are working towards is one of sustainability”

Despite Stewart’s initial input, which saved the club, Rotherham were unable to agree a Company Voluntary

Arrangement (CVA) with its creditors before the 2008-09 season began. Failure to meet this Football League requirement, applicable to all clubs exiting administration, meant a hefty 17- point deduction for that upcoming campaign. “I do understand the motives for it,” says Douglas. “To protect the integrity of the sport. But it was harsh. After Tony came in and saved the club he was told that, for all your trouble, here’s a seventeen point penalty.”

That points deduction, and preceding administration, was further drama for the club. Only two years before, under the stewardship of the trying yet cash-poor Millers 05 group, the club amassed losses of around £140,000 a month and, even after a takeover by a consortium of local businessmen, slipped into administration two years before they would do so again in 2008. The resulting 10-point penalty for 2006-07 rocked preparations for their League One campaign and the club were relegated by the end of that season.

A great fall for Rotherham that only a few years previously, during Ronnie Moore’s first spell as manager, had risen to what is now the Championship. During their four years in that division, they competed gallantly with, among others, West Ham, Stoke City and Wigan. Moore is back as manager, he took over from Mark Robins when he moved to Barnsley a year ago, and is building a promising side. They reached the League Two play-off final in May, losing cruelly (2-3) to Dagenham and Redbridge on that Wembley afternoon they had led twice. While this campaign they are one of the favourites to finish in the top three and gain automatic promotion as of October 25th they were fourth.

Significantly for Moore, thanks to the financial stability the club now enjoys, he is able to keep this side together. Or at least await fair transfer fees for his better players. Alan Le Fondre, twenty-nine goals last year, on track for a similar number this season, and midfielder Nicky Law stand out. Neither has to be sold for lesser amounts just to service a debt. “In the past clubs would ring us up with derisory offers for players,” remembers Douglas, “knowing we were probably so desperate for money that we’d take the offer. That doesn’t happen now. There are players here whom we’ve had no bids for, largely because other clubs know they’re going to have to offer at least market value to get them. We are realistic. We understand that players are ambitious and want to climb through the divisions hopefully they can do that with us but we have moved away from being a club that continually has to sell players just to keep the books balanced. Our position now is much more comfortable.”

The Millers currently play home games four miles away from Rotherham at Sheffield’s Don Valley stadium a 25,000 seated, £30 million folly of the City’s Council built for the 1991 World Student Games. A few factors having led to the club’s move there two years ago: the rent demanded to stay at Millmoor (their home for over a century) by the former Chairman Ken Booth was considered too high, while other, unspecified, reasons made it “impossible” to stay in the town.

“The decision to move was not made easily,” says Douglas. “In one way it is cheaper to go to a stadium once a fortnight, hire it for the day, then get out of there instead of maintaining it full time. But we don’t control the concourses or the corporate hospitality at Don Valley, so are denied those revenue streams. And because the stadium is a big place with an athletics track round the pitch, we’ve never had the right amount of people in there to create much of an atmosphere.

“once we have built our new stadium, there’s no reason we can’t be an even more stable, more successful football club. We have clear strategic objectives and our ambition is to rise through the divisions.”

”The residency in Sheffield is though only temporary limited to four years by the Football League who hold a £750,000 bond to make sure. There are plans to move back to the town. The Rotherham Community Stadium 12,000 seats; a sweeping and compact design courtesy of KSS, architects for Tottenham‘s planned new ground; a central location with a two year expected build time, subject to planning consent will, it is hoped, secure the long term future of the club. First, gate receipts should increase.

At Millmoor Rotherham averaged 4,700 in 2006-07, their relegation year, and 4,200 in their last year at their old home in League Two; in Sheffield, still in League Two, it is nearer 3,700. At the new stadium those 500-1,000 or so lost supporters’ are likely to return at once, perhaps to be joined by those who can be tempted away from the big Sheffield teams, Wednesday and United. Commercial revenue will increase too, a proven benefit of most new venues. Locally Chesterfield expect to reap such benefits after relocating from the ageing Saltergate to the brand new B2net stadium. Speaking to F.C. Business in May, the Spireites’ Dave Allen expected at least a £500,000 boost to commercial revenue by the second year of the ground’s operation.

A site for the stadium has already been purchased by the Council in the heart of the town. Most of the expected construction costs, almost certain to exceed £15 million, should come from private enterprise. “We are positive that if talks continue as they are with the partners’ we are working with, then we will achieve sufficient funding,” says Douglas. When built, possibly by 2012, the club will rent the stadium on a long term lease, enjoying all the benefits of match and non-match days (a significant improvement from their current arrangement at Don Valley). The move to the new ground, with the associated increased revenue streams which are expected, should only strengthen the club’s current financial position. It will, believes Douglas, “be a fantastic benefit for our football club.” Rotherham is a club that spends its limited resources carefully.

Certainly, if their Chairman were not so generous, their costs, and probably their current League Two placing, would not be quite as high. As a direct consequence of his continuing investment in the club, the team is better able to compete towards the top of the division some might consider this unfair. But as Douglas argues, “Tony spends his money to try and make sure we are run competitively and successfully, in the hope that this level of investment may be cut and the club becomes self sustaining.” Crucially, too, the Chairman can be relied on to stick around. “Tony would never, and I can say this categorically, leave us in a position where we would face economic difficulty,” insists Douglas. And while the Millers wait for the new stadium, Stewart’s input appears a satisfactory bridge until then.

At Rotherham United there exists a happy mix of philanthropy, prudence and sense. As a result, the club is, at last, protected from financial collapse. It may soon also have the platform from which to prosper. “Our business plan shows that once we have built our new stadium, there’s no reason we can’t be an even more stable, more successful football club. We have clear strategic objectives and our ambition is to rise through the divisions.”

On evidence, a realistic aim.