Take the leaseback deal or we go bust

Either accept a deal which involves selling and leasing back the Dean Court stadium or see the club go into administration within days.

Chairman Peter Phillips says he would have to resign if shareholders - the biggest of which is a fans' trust - do not tomorrow back the plan to sell and the stadium and rent it from the new owner.

And in a boost for the chairman, the AFC Bournemouth Community Mutual membership overwhelmingly said yes to the proposed sale.

The vote, revealed last night, was 258 in favour, 17 against with three abstentions.

In a statement the Mutual said the club now needed to show it could adequately restructure the business. If it does, the Mutual will use its controlling 51 per cent share of the company to support the sale- and- leaseback tomorrow night.

During his three years as chairman, Mr Phillips has seen the club still dogged by debts dating back all the way to its re-birth as a community club in 1997.

He believes the club has to accept the sale-and-leaseback deal or take its chances in administration.

"The board have naturally considered in some depth the alternatives and we believe that the alternatives are significantly more risky and potentially worse for the club than the re-financing deal on the table now," he said.

He said he could not predict whether the Cherries would die if the sale-and-leaseback does not go ahead, but added:

"What I do know is that if we don't do this deal we will be forced into administration by the Inland Revenue within days and from then onwards we will be in the hands of an administrator or, worse, a receiver, and we will certainly have a crisis on our hands."

He said he would be forced to resign if the shareholders did not back him. "It's not a promise to the people that don't like me or a threat to the people that do, but if the board on Friday recommends acceptance of this deal and we are rejected by our shareholders and our supporters, then not just myself but the whole of the board really will be in an untenable position. It's obvious," he said.

"That will be the end of it as far as I'm concerned."

He has already paid tribute to some major creditors who have agreed to settle for less than they are owed.

Former chairman Tony Swaisland will accept £200,000 of the £300,000 he loaned the club, and has been paid no interest.

Fitness First, which loaned the club £600,000, has agreed a deal under which it will only see £200,000 back, and has also received no interest.

The club is still waiting to hear what terms club president Stanley Cohen, whose company Northover and Gilbert loaned the club £1.4million, will accept.

The sale-and-leaseback would pay off the £650,000 loan from the club's first-charge creditor, Lloyds Bank, and the £235,000 owed to Bristol and West, another company with links to Mr Cohen.

The high rate of interest means the Cherries will have paid £400,000 Bristol and West in the end. The sale-and-leaseback would also pay the club's debts to the Inland Revenue.

Many small creditors will still not see their money, but Mr Phillips says their chances of being paid will improve.

"The worst outcome of all for our small, unsecured creditors would be that this fails, because if it fails the club is likely to end up in the hands of an administrator or receiver and they will be lucky if they get anything," he said.

"This deal will not pay enough to repay all our supporters and trading partners in full straight away but it does greatly improve their position in the pecking order."

Hiring anyone to do work at Dean Court has understandably become difficult in recent times. "People say we're not running the business properly but it's very difficult to run a business properly when you have no money at all and no overdraft facility," said Mr Phillips.

"You can't make the normal rational business decisions. You're very limited as to how much you can afford to spend and limited in the choice of who's prepared to do business with you.

"We have to rely on a great deal of goodwill. We use a lot of barter, where people will come and do things for us in exchange for seats or boxes or advertising boards or whatever and we live hand-to-mouth like that."

Many clubs are in the same situation, he added.

Mr Phillips became chairman at a time when his predecessor Tony Swaisland was having difficulty selling fans on a previous sale-and-leaseback proposal.

He insists that the new would-be landlord is interested in the long-term future of the stadium, and that the club would have the option of buying back the ground.

"It's a deal we're far more comfortable with but we still have to be sure that we can pay the rent, just as if it were a large mortgage we have to be sure we can make the mortgage payments," he said.

"Otherwise your home is at risk, as they say, and that will be the challenge for us."

First published: November 10