Bitcoin Bantams?

I’ve been asked by a number of people for my thoughts about the rumoured takeover of BCAFC (see link to Washington Post feature belowand read the comments at the bottom of the article, the majority of which ridicule the proposal). I suppose it was inevitable that when ownership passed from Stefan Rupp it would be unconventional and this is about as far off the scale as it could be.

I won’t pretend to be an expert about cryptocurrency but I am familiar with business finance and the full range of outcomes from instances of success on the one hand to situations of business failure and fraud on the other. The common denominator is that no commercial organisation can defy financial gravity indefinitely. At some stage it has to generate profit (or more importantly cash) and to fulfil the expectations and obligations to its stakeholders.

Football is no different and even basic 101 company finance still applies. Notwithstanding the casino culture that dominates the sport, loss-making clubs survive only because someone is prepared to fund them and/or waive debt repayments. Insolvency processes such as administration have allowed clubs to wipe the slate clean, clear down their liabilities and start afresh but it still destroys value. As in the case of BCAFC it also leads to the loss of assets. Of course, a club / company can recapitalise itself through generating future profits but it doesn’t always work out that way. The bit that ultimately keeps a club alive is the emotional attachment of supporters and a funder.

With regards to BCAFC we have a situation where the owner paid over the top in 2017 to buy the club and has had to increase his exposure to fund losses. It’s an open secret that he would be happy to step aside if he could recover his investment but the niggling issue is that the club is simply not worth his valuation.

Probably the best thing for the club is for Stefan Rupp to write-off a massive chunk of his investment and allow a new owner to breathe new life to the club. But aside from the fact that this demands charity from him in terms of writing-off £ millions it also means finding a suitable new owner. The said new owner will need to resign him/herself to the fact that the club doesn’t own its ground, pays an extortionate rent and needs considerable spending on the ground as well as training facilities. It’s not the prize investment that we might like to believe.

Accordingly BCAFC is hardly a glittering opportunity. All the talk of being a big club with big attendances overlooks the fact that (a) we don’t have the pedigree of clubs who haven’t spent the bulk of their modern history in the lower divisions and (b) this is Bradford and not the affluent SE of England. Hardly the recipe to attract big commercial sponsorship.

So where does that leave us?

The only people likely to buy the club from Stefan Rupp at his valuation are either (a) nuts; (b) laundering money or (c) a combination of the two. We have become a zombie club, the consequence of the last shit or bust episode and the fact that there has been under-investment for the past 20 years. Going forward we either continue the ongoing struggle, albeit one underpinned by sound finance and an ethical (albeit disinterested) owner, or take the risk of the white knuckle ride. Here cometh the latter.

If there is substance in the cryptocurrency offer – and that offer is accepted by our current owner – it amounts to shit or bust for BCAFC. Crypto is no more than another way to accumulate capital and potentially access more funds than conventional methods. That in itself is risky given that the value of crypto currency fluctuates in real terms. Hence whilst it could bring a massive war chest, as a means of funding it is incredibly volatile – endless riches or endless losses for those who hold crypto currencies.

The interesting bit is the promise to unlock new revenue streams through exploiting the BCAFC brand in new global markets. At this point I take a deep breath. The proposition that BCAFC / Bantams could be a global brand… seriously, we should be flattered. In all the time that I have followed the club – including that momentary tilt at Premier League glory – we failed to leverage our brand in Yorkshire, let alone the UK. But heh, the world is full of gullible people who might yet associate claret and amber with a mighty football club as opposed to Harry Potter. We can but hope. The likes of Sheffield United and Hull City don’t appear to have made much progress with their global brand ambitions but our prospective owners – who confess they know sweet bugger all about English soccer – might yet have the magic ingredient that has thus far been overlooked by others.

Who knows, armed with a massive crypto war chest BCAFC could attract a multitude of new talent to Valley Parade that will deliver success. Quite possibly. The ambitions at Notts County were never realised but maybe these yanks can do it differently.

What it boils down to is that these investors are looking for a club to secure a place at the casino table. They don’t care which club. They have no emotional connection to BCAFC and most likely know nothing about Bradford. But from afar we look a perfect investment choice. Just like Edin Rahic did they can see decent crowds, a ground with a reasonable capacity and see that we have a Premier League – ahem – ‘heritage’. Forget that we don’t own the assets and forget that we are based in Bradford, that’s unnecessary detail.

Essentially this is an investment by an Edin on steroids. It’s Premier League or bust. And the probability of success before they get bored and give up the ghost? What fate for BCAFC if the experiment doesn’t succeed? The resumption of derbies with Bradford Park Avenue in the Northern Premier League perhaps? Who is likely to rescue us next time?

There is the temptation to view any new owner as preferable to the incumbent but that doesn’t mean these candidate owners are capable of fulfilling their stated dreams and that there won’t be considerable collateral damage. The apparent sweetener is the promise of fan ownership but that doesn’t mean simply enfranchising the 15,000 who regularly attend games. Ownership will be extended to anyone who wants to partake in the crypto ride as consumers, investors or as a punt. Ownership will pass to people whose passion for BCAFC is likely to come and go on a whim. What voice for the spectators who consider themselves to be the real fans who actually attend games and invest a considerable emotional commitment? The example of Ebbsfleet United demonstrates how quickly enthusiasm for that club passed out of fashion. Would BCAFC really be any different?

It would be great if these guys have the credibility to deliver but on the face of it I am massively sceptical. It’s going to be interesting and arguably a final fling for a zombie football club but don’t be surprised if it goes badly wrong. Crypto currency, magic beans or pound coins, you cannot defy financial gravity.

Feature in the Washington Times that broke the story 16-Dec-21

Commentary from David Storey, English journalist: WAGMI United: The thought of Bradford City being bought by this clueless crypto crew fills me with horror – 16-Dec-21

Some background here about NFTs and the individuals promoting them

John Dewhirst