The Morecambe board give what has been described to be a damning yet clear update as a new Twitter thread shows how serious situation is.
The likes of Cole Stockton, Connor Ripley, defender Liam Gibson and playmaker Dan Crowley are among players to leave Morecambe after their relegation to League Two.
The Shrimps have confirmed 14 players are leaving following the expiry of their contracts, with no players offered new deals and six players under contract for the 2023/24 season.
Morecambe’s relegation was confirmed with a 3-2 defeat at Exeter, the final day of the campaign.
They have been struggling financially, with players paid late, relying on “significant” investment from Sarbjot Johal, whose perspective takeover of the club is yet to go through.
“To the departing players, it is very difficult as some of them have been with me here for a significant period of time,” said manager Derek Adams.
“Ryan Cooney, Liam Gibson and Cole Stockton were all part of our play-off winning side and depart with nothing but my best wishes for everything they have given both me and the football club.”
Donald Love, Max Melbourne, Farrend Rawson, Jake Taylor, Jacob Bedeau and Adam Mayor are the players who remain at the club.
Released players: Connor Ripley, Liam Gibson, Ryan Delaney, Dan Crowley, Cole Stockton, Ash Hunter, Adam Smith, Andre Da Silva Mendes, Arthur Gnahoua, Oumar Niasse, Jon Obika, Ryan Cooney, Pape Souare, Courtney Duffus.
Morecambe have said that they have paid all wages due for the month of March after the owners of the League One club, Bond Group Investments had put it up for sale back in September. Sarbjot Johal is still awaiting the completion and takeover.
The club did confirm that Johal made an “important” six-figure financial investment.
“We would like to place on record, our thanks to staff and players for their patience,” a club statement said.
It continued: “The selflessness and commitment shown across the football club has been incredible during a challenging and stressful time.
“We will continue to work extremely hard behind the scenes to make sure this is avoided going forward.”
Referring to Johal’s subsequent investment, co-chair Graham Howse added: “We are grateful for the efforts and generosity of Sarbjot and the team at Sarb Capital.”
Jason Whittingham, along with co-owner Colin Goldring, resigned from the board when the Lancashire club was sold earlier this season.
Whittingham and Goldring owned the rugby union team Worcester Warriors, who went into administration last September, and have been suspended from playing this season in Premiership and relegated.
Tyson Fury, a Morecambe fan and boxer, was previously linked to buying the Shrimps before Johal began to takeover.
In February, the EFL invited Johal and his company Sarb Capital to discuss their proposed takeover after they had purchased equity in the club.
Following the conclusion of the 2022/23 season, we bring you an update from the Board. https://t.co/2mo2Wmf280
— Morecambe FC (@MorecambeFC) May 16, 2023
CLUB STATEMENT:
Following the conclusion of the 2022/23 season, we can provide the below update from the Board:
Firstly, we would like to sincerely thank our staff, players, sponsors, supporters and the wider community for the endeavour, effort and resilience shown over the past season. On the pitch, the team battled bravely, falling narrowly short of avoiding relegation in our second season in League One, which would have been a magnificent achievement. Off the pitch, our staff have continued to work in a professional and positive manner throughout the season, leaving many aspects of the Club in a much better position once again than which we started.
As most will be aware, this season has been overshadowed by matters away from the pitch. As some background, which is or will shortly be in the public domain, after year-on-year losses for a sustained period, the Club posted a healthy profit for the first time in 2021, and we will shortly be publishing our 2022 accounts, which will show a profit just over £1 million. This income was derived over those periods from on pitch success, cup runs and associated TV & sponsorship income, significant player sales, Premier League and EFL grants, insurance claims and prudent cost management through the pandemic and improved commercial performance across the Club. This was particularly prevalent in 2022, with over £2.4million income received from the ‘one-off’ streams. During year end 2022, almost all the remaining loan and interest owed to the owners, Bond Group Investments, was repaid at their request and within their rights. It made sense to clear this debt which had attached a high rate of interest agreed before the current owners secured a majority share. In the 2021 accounting year, around £647,000 was also repaid. We would all have wanted this money to stay within the Club to allow investment and growth, but the clearing of the debt served to strengthen the balance sheet in advance of a sale.
The result of this left limited cash reserves coming into this season. In our 2023 accounts, which will be published in due course, we will be reporting a significant loss in the region of £750,000 to £800,000. Our playing budget, which is a significant proportion of our annual expenditure, was set in the summer of 2021 upon promotion, for a two-year period due to the number of contracts of this length we were required to hand out. This represented a doubling of our 2020-21 League Two playing budget. Over the first year of those contracts, around £1.8million was repaid to Bond Group against the aforementioned loans, leaving us virtually debt free but with limited cash at bank.
We were unable to make any adjustments or reductions to the playing budget in summer 2022, as the majority of contracts still had 12 months remaining, and we wished to remain as competitive as possible in League One. Whilst we have continued to grow revenues across the Club this season, we have only been able to repeat a fraction of the ‘one off’ income streams in 2023, resulting in an operating loss which the owner has underwritten with a mixture of loans and equity investment, as well as a mixture of loans and equity investment from Sarb Capital, as has previously been communicated.
The Club was publicly placed for sale in September 2022, and since then there has been a lot of noise externally in the media, which has been somewhat destabilising for players, staff and supporters. Wages were paid late in March 2023 by a matter of days, which was devastating for everyone concerned at a critical point in the season and a totally unacceptable situation.
We are now here, 8 months after the Club went up for sale, and we remain in a state of uncertainty as to when a sale is going to be completed, which severely hampers future planning on and off the pitch, until this is resolved and stability ensured. We have been informed by Bond Group that we need to work to a breakeven budget at the moment, resulting in a very much reduced playing budget and leading to the release of all our out of contract players earlier this week.
Having seen such marked progress on and off the pitch since the beginning of 2020, through the collective effort of every single person associated with the Club, we urge Bond Group, who remain solely and completely in control of the sale process, to complete a suitable sale of the Club as quickly as possible to ensure we have the best possible opportunity to continue to grow as a football club and focal point for the community in the Morecambe and wider North Lancashire area.
Thank you once again to our staff, players, supporters & sponsors who continue to fight every day to keep us moving forwards.
Martin Calladine, known as @uglygame on Twitter, wrote six days before the board’s latest statement: “Thread on the disastrous Fit and Proper Limbo that Morecambe find themselves in, post-relegation, with the EFL unwilling or unable to break the club’s ownership logjam, leaving the club in crisis and facing an uncertain future.
“Morecambe have been up for sale officially for eight months, unofficially for longer. The owners are seemingly out of cash and have to sell. It’s been reported that there have been a number of offers, but one, in particular, that blows the others out of the water.
“Problem is, in nearly six months, this buyer has not passed the EFL’s Owners and Directors Test, specifically the section requiring a prospective owner satisfies the league on the “source and sufficiency” of their funds. IE that they are good for the money & the money’s clean.
“In February, the EFL tried to knock heads together, summoning the buyer and seller to a meeting. It was reported that further information was required of the buyer. Over two months on, the ODT has still not been passed and the sale been approved.
“In that time, wages were paid late and the buyer is reported to have injected cash into the club, to help with running costs, in exchange for shares. So the buyer owns an increasing stake in the club but can’t get league permission to buy it outright and take over.
“The club meanwhile has been relegated and, with no new money from the current owner, and a stalled takeover, has had to let *all* its out of contract players walk. It currently has six first teamers on the books. It’s facing League Two with no clarity on its budget.
“And here’s the limbo. Why doesn’t the EFL impose a deadline on the buyer passing the ODT? Well, reading the regs, either by design or by oversight, it doesn’t seem to have the power to.
The EFL has the power to require a prospective owner to submit information about the source and sufficiency of funds. And they appear to have a responsibility to process that in a defined period. But…
8/ pic.twitter.com/I2fyCVyXwL— Martin Calladine (@uglygame) May 10, 2023
They do not appear to have the power to compell an applicant to complete the process in a set time frame. The additional powers mentioned below all relate to internal club activities, not the provision of source and sufficiency information by the buyer.
9/ pic.twitter.com/dBTbZjA73l— Martin Calladine (@uglygame) May 10, 2023
“In other words, the regs, as I read them, do not allow the EFL to time someone out on the source and sufficiency of funds test if they are attempting to provide additional information. Provided the submission is delayed, the test is neither passed nor failed. Ownership limbo.
“Why the buyer hasn’t been able to satisfy the EFL isn’t clear, but suspicions must be growing that the current owner doesn’t want to let the highest offer go and, with the buyer, is hoping the sale can be racheted through.
“I don’t know if the EFL purposely didn’t take the power to time limit the ODT process or whether it didn’t occur to the drafters that there would ever be a situation where buyer and seller would be united in a willingness to drag their feet.
“Whatever the cause, the situation will only grow worse as Morecambe get closer to a new season unable to make meaningful spending decisions, leaving the current owner with an ever growing gap between the club’s actual worth and the bid he wants but can’t get through the EFL.
“Unless the buyer can suddenly satisfy the EFL or the current owner can face up to the fact that he won’t get what he wants for the club, Morecambe must be considered a club in serious peril.
“It’s a slow-motion car crash.”
This is what fans are saying as the Morecambe board give a damning yet clear update while a Twitter user’s thread shows how serious the situation is…
@georgemarshhh: Jesus this isn’t good reading 🫣 Jason would be a brave man to show his face anywhere near here again like
@CassBen1: What are you doing about this @EFL_Comms @davidmorrisml ???
@jenhunt_: Bond Group kindly fuck off :)))
@rooobellis: This really needs to give the @EFL a kick up the bum to get things moving. It’s put up or move on time surely?? Also hope it helps people who were calling for the board to “spend the money from player sales: understand their knee jerk reactions were way off!
@Wozz77: Hopefully a sale happens for you soon, seen this so many times in the last few years..
@Georgethomas_66: Going down.
@JamieBurrell91: We’re basically fucked. The board must feel sick that all their hard work if being flushed down the drain by some money hungry scumbag.
@RCGittins: have you seen this #EFL
@joelshooter47: It’s kind of stuff we loosely knew, but great from the board to offer this level of openness/detail and to then go on to publicly call for a suitable sale 👏 An incredibly bold statement, we’re lucky to have the board we do at the club.
@j_bell17: Even the board is tired of these clowns. EFL needs to sort their shit out and convey a decision
@stormcloud25: Dear Bond Group. Get out of our club.
@thescreenster: Get out of our club @BondGroup2
@LiamOneThree: Bond Group need to get as far away from this club as possible and fast 🫠
@JamieSaul89: Excellent from the board 👏. Don’t deserve the shit they’ve had to handle
@SallisMichael: Very damning yet clear statement from the board: get out of our club Bond Group. Goes to show that the Board and Derek Adams, who has had more than his fair share of critics, have done an exceptional job and are a credit to the club.
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