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MAJORITY SHAREHOLDER PAUL BARRY UPDATE

12 May 2019

Majority Shareholder Paul Barry provides his thoughts on the reasons behind the recent financial results, the Club's current position and the desire to seek fresh investment to carry Cambridge United forward.

The Shareholders are all longstanding fans of the Football Club, many of whom have contributed through the generations with volunteer work and they have been concerned about the long-term viability of the Club. There have been mistakes made over the last few years as we have moved back into the Football League and received a large amount of money through the Manchester United games, where the management and budgeting of the Club hadn't been brought up to speed.

From being a business with a £1.5 million turnover to five plus million, when you make mistakes after you have nearly tripled your turnover then it becomes more three times more costly if not more. The over budgeting and over expansion is fundamentally what has happened.

In hindsight, and everybody can have hindsight, everybody believed that we had gone from a struggling conference club to the FA Trophy Final, the Play-Off Final and Manchester United games and were on course to be another Bournemouth who could go up through the Leagues having found a successful magic winning formula. In reality we hadn't. We had a good squad of players and a good head coach and some success on the pitch as happens in football, and that optimism and exuberance went off the park as well.

I run a number of business, I love to work and one factor that is true amongst every business I have been involved in is that you need up to date finance reporting and relatively accurate budgeting. The budgeting can of course go up and down but that must include re-forecasting and change. Then you can make better business decisions - because you will not always make the right decisions as nobody can ever always make the right decisions - but if you have good information you can make better decisions. The Club simply did not have that information and frankly a lot of it was run in a small-time football club manner instead of a League Two football club manner.

That has been addressed by the Board of Directors in the past year by bringing in a proper Finance Director [Duncan Foyle] and they have also made some far better decisions on the non-football side of the business, which are ones they can affect.

In terms of the underperformance on the pitch there has been a consistent turnover of players in terms of recruitment and the head coach model. Usually when you have that turnover using a head coach model it's because things aren't working well off the park and that leads to new a head coach coming in, inheriting a group of players that are not his or do not play his preferred style. That usually leads to underperformance. Going into 2019/20, we do now have a coach and football staff who are on the same page and there's an opportunity therefore to redo the first team squad into a manner of his liking with a group of players that fit his style of football.

Most League Two football clubs, as was discussed within the shareholders meeting, lose on average approximately £500,000 a year as we have been told by the EFL. However, within that if you were to strip out all of the fortune income that comes in that we had with the Manchester United games and other clubs such as Newport have had with runs in the Cup competitions or sold a player in the way that Cheltenham Town and Exeter City have done really well, the losses will equate to a lot more than that £500,000 figure.

That is the norm and it's perhaps the lesson I would like the shareholders and supporters to learn that the days of us running it as a voluntary club and having a whip round amongst the Directors or the shareholders to keep the Club viable, is not the right way anymore because we will end up putting the club back in the Conference. That is exactly where the budgeting would take us if we were to carry on using that model.

So I have told the shareholders that I believe the right model moving forward is we have a new investor group come in who can invest their time in improving some of our income streams here. The Board has done a good job this year in terms of cutting costs as well as increasing revenue streams. The new group will be able to do some work on sports management, on working work with head coaches etc. I do believe that can happen and that Cambridge United is a highly attractive brand, within the fastest growing city of our size in the country. With the right sports marketing we should also be able to attract new sponsors.  

If that doesn't happen then the Board and I will sit down and work things out. We have some very intelligent and well-connected members on the Board, we would work out a strategy to keep the Club going in one format or another.

I have my season ticket for next season and I will continue to sit next to my mum. In some respects you can look at this year and say we didn't perform well on or off the park. I'm optimistic we are giving ourselves a far better opportunity going into this season though, certainly than we did last year and the year before that. That's not down to the budgeting but purely the consistency and the people involved who are all aligned on the same page.

Off the park there is of course slight uncertainty about where the funding comes from, but we have a resourceful group of directors and supporters which means I am sure this will get resolved. The inputs I put in this year were £1 million and there was a substantial sum the previous year as well. I am fortunate that I love working and that my businesses are doing well that I can do that. But it's not something I feel is right moving forward.

I have great confidence that things will work themselves out for this Football Club, and I would like to believe that in five years' time we'll be looking to move into a new stadium at potentially a new greenfield site, that's if we are not playing in it already. There's also of course the encouraging news about the new training ground site, very close to where we are located. That would allow us to work at achieving a higher academy status.

The whole infrastructure around Cambridge United is very promising too that's why I say it's important we need to bring in some fresh investors with a sports management background, not even necessarily in football who can come in and take the bull by the horns.

Click here to read the report from yesterday's Shareholders Meeting at the Abbey Stadium.


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