A RENT row has been revealed as one of the reasons for the delay in settling the Galpharm Stadium shares dispute.
A new report into the dispute by Sir John Harman, chairman of Kirklees Stadium Development Ltd, has revealed a stand-off between Huddersfield Town and Huddersfield Giants.
It appears a sticking point to agreement of the shares transfers is that the two respective owners of the clubs, Dean Hoyle and Ken Davy, cannot agree the rental formula for use of the Stadium.
New figures showing the rent paid by each club reveals that in 2009/10, Town paid £703,505.25 and the Giants £241,494.75.
Those figures are based on an agreement dating back to 2004 but adapted to slightly increase the Giants’ share.
The two different rent formulae that are at the centre of the dispute show that the extra cost to Town would be £24,900 if one was chosen rather than the other.
Town owner Dean Hoyle has said he wanted the club to get back the shares that were taken into another company by Ken Davy when he stepped in to save the soccer club from administration.
Sir John – who pledged to do all he can to end the deadlock – also revealed that a new financial commitment from Kirklees Council to the stadium was close to being agreed.
That would end the annual revenue payments made by the council to the Stadium company and replace it with capital sums, under new agreements.
That would mean valuable savings for council taxpayers – thought to be tens of thousands of pounds each year.
That issue could be determined later this month but if the two clubs cannot agree, the shares transfer cannot be completed.
Sir John said: “Over the last few days statements have appeared in the electronic media and the local press concerning a dispute over the shares of KSDL.
“Some of these statements are speculative or misconceived, and KSDL wishes to ensure accuracy, both in its own interests and in the public interest, given that Kirklees Council is a major shareholder.
“KSDL exists to enable the interests of the council and the clubs to be properly represented in the operation of the stadium and continues to work for an agreed way forward.
“KSDL has supported the proposed share transfer and has actively sought to resolve the remaining obstacle by negotiating a new financial settlement with the council.
“Calls by supporters’ organisations to damage KSDL income by boycotting stadium catering or other services are misplaced.
“Every penny earned by KSDL goes into providing the best facilities that we can for the clubs and their supporters. An example is the investment last year of around £750,000 in reconstructing the playing surface to keep it up to the highest current standards.
“KSDL has never paid a penny in dividends to shareholders, ploughing all profits back into the business and gradually paying down the original construction costs.
“As a result, both clubs have access to top class facilities at a cost far below what it would cost them to provide themselves, and the town has a multi-use venue, partly owned by the council, which is already attracting significant income and is set to become the core of a major leisure destination for the region.
“The company remains hopeful that there will be a successful transfer of shares to HTAFC and will continue to work to enable an agreement to be found, while providing the best possible facilities for the clubs and their supporters.”
See next page for how we reached the present situation with information from a statement issued by Sir John Harman.
IT is an issue that has rumbled on for years.
And in recent weeks, there have been angry emails and even fans’ protests about the disputed ownership of shares in the Galpharm Stadium.
Town owner Dean Hoyle has pledged to get back the shares in the soccer club that Ken Davy took over when he saved the then ailing club from admininstration.
But it seems neither side can reach an agreement and the prospects of a deal ended in acrimony just before Christmas.
Sir John Harman, chairman of KSDL, has come up with this background to the issue.
FROM its beginning in 1992, Kirklees Stadium Development Ltd shares were owned 40% by Kirklees Council, 40% by Huddersfield Town and 20% by the Rugby League Club.
Their agreement provided that no share transfer can be made by any shareholder without the others’ consent.
After HTAFC had been bought out of administration by Ken Davy in 2003, all of the non-council shares were transferred to a new company, Huddersfield Sporting Pride (HSP), as agreed by the shareholders.
Following Ken Davy’s later sale of HTAFC to Dean Hoyle, those two individuals came to an agreement, in February 2010, by which 40% of the shares would be transferred from HSP to HTAFC, thus returning the share distribution to its original form.
KSDL is aware that there are other financial elements to this agreement but has no knowledge of their detail and therefore cannot comment further on them.
This agreement had an expiry date of August 31, 2011, but the parties to it agreed to hold it open pending further negotiations.
The proposed transfer of 40 shares in KSDL from Huddersfield Sporting Pride to HTAFC required the approval of the council. In the light of the pressure on its finances, the council said that before it would approve the transfer, it wished to negotiate how it could be relieved of an undertaking it had signed in 2004 to provide annual funding to KSDL.
It had given this undertaking to support the stadium at a point when HTAFC, and therefore KSDL, finances were in a parlous state.
This request was not immediately acceptable to all parties, and no progress was made in resolving matters during 2010.
Up to that point, all of these propositions were matters, not for KSDL itself, but for the council and the owners of the clubs.
But by early 2011, KSDL became concerned that prolonged uncertainty over the transfer was not in the best interests of the company, and over the summer months it negotiated a financial settlement satisfactory to the council which commutes the annual revenue payment into capital contributions to be made under agreed conditions.
In August 2011 the council indicated formally that it could accept this settlement and therefore now approve the share transfer.
In order to give effect to this settlement, the parties to the current stadium Collaboration Agreement (CA) have to amend that CA to restructure the council’s financial obligation.
It is in this context that a dispute over the rents charged to the respective clubs has emerged.
The wording of the existing CA allocates rental charges between the clubs in proportion to their gates, but since 2004 the agreed practice has been to increase the proportion paid by Huddersfield Giants by a factor of 15/13.
That means the club would pay the equivalent of 15 games and not 13.
The clubs have not been able to agree which of these formulae should be applied in future.
KSDL would prefer to have had a final agreement in place on this matter and to this end has done what it could to achieve one. Last month a final attempt to have the rental formula determined by a process of arbitration was unsuccessful when Ken Davy restated that his position on this was non- negotiable.
At its next Board meeting KSDL has to decide whether to proceed with the financial settlement with the council in the absence of an agreement on the rental formula.
If we do so, we expect that the council will give its formal consent to the share transfer.
But in the last few days it has become apparent that the February 2010 deal is no longer on the table, as Dean Hoyle’s lawyers have made clear.
The actual rent payments due for the Stadium in 2009/10 were:
TOWN £ 703,505.25 = 74.45%
GIANTS £ 241,494.75 = 25.55%
If the calculation had been on 13 games not 15 the swing towards Town would have been an extra £24,900 to pay.
The proportion paid by the clubs has varied quite widely over the years as their fortunes and gates have ebbed and flowed.
The football club has always paid the greater proportion due to its larger annual gate.
The highest proportion paid by the football club was 88% in 1995-6 and the lowest 65% in 2007-8.
See next page for statements by Kirklees Council, Huddersfield Giants and Huddersfield Town.
KIRKLEES COUNCIL leader Clr Mehboob Khan said the council will continue to work with all parties to assist Huddersfield Town, Huddersfield Giants and KSDL in achieving future success.
“It is almost 20 years since KSDL was created by the council and the clubs, and the stadium came into being. We have been committed to the partnership since day one and know that the creation of the stadium, a fantastic regeneration project, has contributed positively to the fortunes of the two clubs over that period.
“It is also vitally important that the public and the supporters of both clubs understand that the proposal to restructure the financial support that the council provides to KSDL as part of the 2004 Collaboration Agreement comes at a time of very real pressure on our services and our budgets. Everyone knows that the circumstances facing the clubs and the council have changed hugely since 2004.
“Therefore it is only fair to taxpayers – while reflecting our continued and strong support for the stadium and both professional clubs – that an agreement is found that relieves pressure on the council’s budget for the medium term.
“We believe that the spirit of partnership and joint use remains as relevant today as it was then, and hope that a transfer of shares can be agreed”.
HUDDERSFIELD Giants owner Ken Davy said: “I obviously welcome this statement which I feel sets the record straight.
“I certainly have nothing to hide and have much to be proud of since the rescue of Huddersfield Town. It has been very frustrating not to speak out because of confidentiality agreements.
“As far as the rental formula goes it is right and proper that each club pays the same for each supporter; a system was created by the founders of the Stadium, well before my time, and has been tried and tested as the fortunes of the clubs have waxed and waned.
“For me to agree to continue on the basis I accepted when I owned and personally funded both clubs would simply not make sense.
“It would undermine the Giants to pay a higher cost than the supporters of Town”.
HUDDERSFIELD TOWN chief executive Nigel Clibbens said: “Huddersfield Town has been pressing Kirklees Stadium Development Ltd (KSDL) to release a statement regarding the Stadium shares since mid-December, both verbally and in writing. We felt this request was in the interests of KSDL, as well as the council and Huddersfield Town. As such we welcome a statement from KSDL.
“We asked for this statement to be simple, factual and truthful and devoid of opinion. KSDL had one attempt to get this right, as the statement would be highly scrutinised.
“Huddersfield Town will make no comment on the content of the statement at this time. We have meetings planned over the weekend and on Monday to consider our official response and position. The club, and its chairman Dean Hoyle, will issue its own detailed statement on Tuesday”.
