HUDDERSFIELD Town chairman Dean Hoyle has today broken his silence over the failed deal which would have seen the club reclaim their shares in the Galpharm Stadium.
And he claimed that a move by Giants’ owner Ken Davy to change a key part of the agreement was behind the breakdown.
Mr Hoyle pledged to work hard to resurrect the arrangement which would see Town reclaim 40% of the Stadium shares, having been close to an agreement up to the end of 2011.
But he said: “Ken Davy then proposed a further change. He wished that the formula for calculating the rent payable by Huddersfield Town and Giants be changed from what he had put in place, and had been the accepted practice by all parties for the previous seven years.
“The proposal in itself was not an unreasonable request and in financial terms immaterial. Rent is one of the many stadium arrangements which could be considered in need of revision.
“Critically to single out just that one issue and then seek to change it after a deal had been agreed was unacceptable to me. It was something extra on top of all the other terms and conditions I had already agreed to.”
Mr Hoyle insisted that until Town get back their shares, they cannot be a full partner in the Stadium deal.
The deal, which was to see the football club return to their original 40% shares ownership, broke down at the end of December.
Negotiations between Town, Huddersfield Giants chairman Ken Davy and Kirklees Council, which were chaired by Kirklees Stadium Development Ltd (KSDL) chairman Sir John Harman, collapsed.
KSDL is the management company which runs the stadium.
The issue dates back to 2003 when Town were bought out of administration by Mr Davy.
All of the non-council shares were transferred by Mr Davy to a new company, Huddersfield Sporting Pride (HSP), as agreed by the shareholders.
This mean HSP held a total of 60% of the shares in the stadium – previously the Giants had 20% and Huddersfield Town had 40%.
Kirklees Council hold the other 40%.
Following Mr Davy’s later sale of Town to Mr Hoyle, the two came to an agreement, in February 2010, by which Huddersfield Town’s portion of the shares would be transferred from HSP to HTAFC, thus returning the share distribution to its original form.
But that deal foundered and Sir John Harman last week made a plea for the various parties to get back to the table to restart talks.
Sir John said last night: “KSDL has made public its view of the issue with the intention of clarifying it for the public.
“It is in everyone's interests for all the parties to come to an agreement.”
Mr Hoyle has now issued a lengthy statement in which he insists Mr Davy had wanted to change a rental formula under which the two sports clubs pay differing amounts to use the Stadium for their games.
Kirklees Council have put forward a new arrangement for their financial stake in the stadium and that is set to be debated by the KSDL board later this month.
See Dean Hoyle's statement in full on pages 2 and 3.
“IT has been uncomfortable not responding to the supporters to date, but the time is right for me to break my own personal silence on the share issue.
“A deal for the transfer of the shares was announced in December 2009 and terms agreed in February 2010 – it was great news.
“Since then, the deal moved slowly towards being completed. After February 2010 when the terms had already been agreed and the deal announced, Ken Davy then proposed a further change.
“He wished that the formula for calculating the rent payable by Huddersfield Town and Giants be changed from what he had put in place, and had been the accepted practice by all parties for the previous seven years.
“The proposal in itself was not an unreasonable request and in financial terms immaterial. Rent is one of the many stadium arrangements which could be considered in need of revision.
“Critically to single out just that one issue and then seek to change it after a deal had been agreed was unacceptable to me. It was something extra on top of all the other terms and conditions I had already agreed to.
“By December 2011 this rent change was still unresolved. In the interests of trying to complete the deal, I then backed the “final attempt” by KSDL, using arbitration, to break the deadlock over the rent formula. Sir John Harman imposed a deadline of close of business December 16, 2011 to agree.
“As Sir John Harman said in the KSDL statement: ‘Last month a final attempt to have the rental formula determined by a process of arbitration was unsuccessful’.
“This arbitration process was agreed to by Huddersfield Town and supported by Kirklees Council, but was rejected by Ken Davy. Then inevitably with the passing of the KSDL deadline, after the ‘final attempt’ had failed, the agreement of February 2010 immediately fell away.
“All the parties knew the consequences and implications of a failure to reach agreement at the ‘final attempt’.
“It would now be easy for me and Huddersfield Town to be drawn into a war of words; seeking to challenge every fact and statement that has recently been issued. At this time, that would not be right for Huddersfield Town or anyone else. Every person involved, including me, will be judged on what they have done and said, and the truth will come out.
“We now have to focus on what is the right thing to do for the long term.
“I acknowledge this may leave many unanswered questions for the moment but whilst things may appear confusing and complex, when you cut through everything it is just about doing the right thing.
“Over the last four years Huddersfield Town has been referred to as a ‘partner’ in the stadium and there has been endless talk of everyone working together in ‘partnership’. I have been told it doesn’t matter if we are a shareholder or not in KSDL – we are still a ‘partner’ – and that’s all we should be bothered about.
“Huddersfield Town is a different kind of ‘partner’ to the council and Giants – we don’t have any shares or ownership in the stadium. Major decisions which affect Huddersfield Town in the stadium can be made by the other two shareholders. We used to have shares, but they were transferred away for £2.
“All this matters to Huddersfield Town and its supporters greatly – the supporters tell me all the time! It will matter more in the future because the return of the shares was so close. Given the circumstances in which the agreement for their return has not been completed, this will now only worsen the feeling of injustice.
“Think of it this way: it is the simple difference between being a tenant paying rent on a property or paying a mortgage and ultimately owning it.
“Also crucially, it matters even more so to KSDL, because KSDL is so heavily reliant on the income from Huddersfield Town and its supporters to be successful, paying 75% of the rent and earning corresponding amounts from catering, beverage and events income – that shows how vital Huddersfield Town is.
“With no ownership interest but having such a heavy commercial impact this weakens KSDL. In a tough economic climate with big challenges ahead, Huddersfield Town and its supporters need to be on board for KSDL to prosper. The council acknowledged this is a major problem.
“The ownership issue was addressed by the founders of the stadium when they set it up. As Paul Fletcher said in May 2009: ‘That (the current shares arrangement) was not how it was envisaged when it was set up. It was always intended to belong to the two clubs and the council, in those joint proportions. We believed it was a groundbreaking partnership, which would serve both clubs and the community’.
“The vision of the stadium was a joint sport, community facility with shared ownership between the council, Huddersfield Town and the Huddersfield Giants. KSDL gained huge strength from this joint ownership structure, with all parties having a real ownership in the stadium and all supporters feeling they, and their club, could play a part in its success.
“In recent years, the clubs have funded major investments to the stadium – such as the North Stand and the extension to the Direct Golf Stand offices, Stadium Superstore and ticket office – out of their own money. These are still being paid for today on top of the clubs’ rents. A successful KSDL could instead pay for investments in the stadium, relieving the clubs of this burden.
“The stadium can function in the current arrangement, but will struggle to prosper and that is not in the interests of anyone. We want to help KSDL prosper and drive forward.
“As we now stand, Huddersfield Town is currently paying 75% of the total stadium rent (this will only rise if Huddersfield Town progresses up the league ladder) plus extra contributions to fund past investments and improvements to the stadium, whilst the stadium continues to be just owned by the two other parties.
“For the good of the community and prosperity of KSDL, the shareholding needs to be restored as soon as possible to the position that was originally in place when the vision for the stadium was created. Only this will give Huddersfield Town and its supporters an incentive to fully get behind and embrace the stadium.
“Despite everything, we will still continue to work for a return of the shares in KSDL to Huddersfield Town. I hope the fans will understand and fully support me.
“As events develop I will continue to update the fans.”
See Ken Davy's response to the statement on page 4.
GIANTS chairman Ken Davy last night responded saying: “I have seen Dean Hoyle’s statement and will restrict my response to a relatively brief comment in order to try to avoid exacerbating the situation.
“Dean and I reached an agreement in February 2010 for the transfer of 40 shares in KSDL.
“Despite me urging completion this agreement expired on the 31 August, 2011.
“I can categorically confirm that I did not in any way, shape or form try to change the terms of that agreement and fully expected it to be completed.
“Further, despite that agreement having expired, I was still fully prepared to complete the transfer of the shares up until the 23 December, 2011.
“On that date lawyers for Dean Hoyle advised that the matter was not proceeding and they had closed the file.
“Separately, the Collaboration Agreement covers operations matters unconnected with the share transfer agreement beyond Kirklees Council’s approval with regards to some funding aspects.
“None the less, at Huddersfield Town’s request I, on behalf of the Giants, made various concessions on operational aspects of the Collaboration Agreement to try to facilitate completion of the February 2010 agreement.
“I was, however, not prepared to see a change to the original rental service charge formula that had that had applied since the stadium was built, apart from changes I introduced when I owned both clubs to assist Huddersfield Town.
“To have moved from the original formula could see the Giants supporters pay more per match than Huddersfield Town supporters for possibly the next 130 years, when the original formula was for both clubs’ supports to bear the same costs.
“To opt for arbitration on matters unconnected with the agreement to transfer the shares would be wholly inappropriate.
“Finally, the stadium improvements such as the extension to the Direct Golf stand, ticket offices facilities and shop were personally funded or underwritten by me to help improve the service for all users of the stadium.”
