Chairman Owen Oyston’s court documents show how he pumped cash into Blackpool FC to save it in 1980s
Yesterday, we published the skeleton argument of Valeri Belokon’s legal case against the Oystons. Today we turn our attentions to Owen Oyston, the millionaire patriarch of the family accused of “improperly” extracting millions of pounds from the club. In a 48-page witness statement used in the hearing, he tells of his love for the club, how the relationship with Belokon turned sour and how the media is against him.
The evidence of the flamboyant millionaire businessman and chairman of Blackpool Football Club (Properties) Ltd – which he described as the Parent Company - ran to nearly 20,000 words and contained elements which could provide scope for a TV business thriller.
Mr Oyston used complex financial details to back up his claims that he had done nothing wrong in his dealings with the club and that all he had ever done was to support it in the same way that five generations of his family had.
The 48 page witness statement also included
• allegations of death threats at a top London hotel against him and his son Karl;
I simply had refused to be bullied into giving shares away for nothing to satisfy his share demands
• an account of how a friendship with club president, Valeri Belokon, had turned sour;
• his denials that he had received the money he is accused of receivin;g
• his view football club investment rates as a “vanity investment” not to be made in expectation of dividends;
• his account of his life-long love of the club since he was no more than a toddler.
Rounding on the way he has been treated he said: “I do not believe we have done anything to deserve such a draconian media and legal onslaught when we have done everything with the intention of being more than fair.”
Declaring his undying love for the club in the opening paragraphs of his statement, he said: “I was a supporter of Blackpool Football Club from 2½ years of age from the time my parents migrated from a mining village in Stanley, County Durham where my father had been a miner and bought a boarding house 500 yards from Blackpool Football Club (BFC).
“I am now 83 and I believe that I am the longest serving majority shareholder controlling a football club in this country, which leaves me at the top of an unusual league table.
“This long term relationship will help to explain my love for the club, my consuming passion which led to my agreement to save BFC from bankruptcy and demolition and my generous attitude in funding this financially stressed club over a quarter of a century.
“My lending has always been unsecured and I did not charge interest. I could not bear to see my club with such an illustrious history disappear.
“This has involved me in nearly 30 years of work, pressure, heartache and great pleasure. I have poured in many millions in cash and interest free loans without security. It has co-ordinated and facilitated my funding operation with the support of the Oyston Group of companies for both BFC and its parent company.”
He said that over 30 years he and his family had built up assets and non-football income which meant that today the Parent Company had “many millions of pounds worth of assets,” no external borrowings, a new modern stadium, a four star hotel and other “quality revenue-producing facilities.”
“Our strategy was to avoid bank borrowings and to create an intercompany funding and self-supporting Group of Companies. Without this group structure Blackpool Football Club could not have survived,” he said.
He said that in 1987 the football companies were insolvent and the club was “racing to extinction” and the only potential purchaser wanted to carry out housing and supermarket development on the ground.
He continued: “It was because of my affection for the club and because of the club’s importance to the town that I stepped in to prevent that fate.” He went on to detail company loans and personal investment made in the club.
On his philosophy of such investment he said: “You simply do not invest in football with any degree of certainty or with the thought that it is a sound and realisable investment. Success is a very difficult thing to achieve in football and even if you achieve success it does not mean that you achieve a profit on your investment. Most people invest in football clubs expecting to lose their money and invariably that is what happens.”
As far as his own investment was concerned he said: “I have often put the club before my family, or before my personal financial interests.”
He added: “BFC has been more than an enterprise to me.
“It has become my life, and the life of my family, all of whom have been impacted by the club, sometimes with pleasure, sometimes painfully. Five generations of Oystons have ridden the roller coaster of football in Blackpool.”
He charted the entry into the club affairs of Valeri Belokon through a 20 per cent shareholding in the company. Mr Belokon is behind Valeri Belokon Football Assets which has brought the current High Court action.
He said he had considered at first that he had a relationship with Mr Belokon that worked and he wanted him to share in the non-football related commercial activities at Blackpool. Because of the friendship between them he wanted him to remain an investor in the club. He outlined details of various agreements, financial dealings and negotiations between them.
But he told the court of apparent death threats made by Mr Belokon over dinner at Claridge’s Hotel in London in December 2010.
“I was having dinner in Claridge’s Hotel with Valeri Belokon (VB) and another dinner guest in the main restaurant,” he said.
“At the time we had been promoted to the Premier League. VB appeared agitated and resentful. I could see there was something wrong. Suddenly he expressed the view that he wanted me to make up his shares to 50 per cent in BFC.
“I said ‘how much are you prepared to pay?’ I reminded him if he had 50 per cent of the shares he would have control, he just stared at me. He later said ‘One way or another I’ll get that 50 per cent’.
“He then turned to my guest: ‘Don’t get too attached to Owen, he’ll be dead in 12 months!’
“My guest was visibly shaken by this remark. And then he said: ‘And Karl will be dead within two years.’ He had more to drink and became more argumentative and aggressive saying ‘I want half the shares’. At first I wondered whether this was some kind of macabre joke. But it was not said with any humour at all and did not appear to be a joke.
“He repeated the statement more than once, stressing that he felt he deserved 50 per cent because of what he had done for the club.
“As the night progressed he drank more and became visibly disturbed and I tried to ameliorate the situation. I recall thinking that the problems of Kyrgyzstan with his bank were troubling him so I did not react to his aggression.”
Mr Oyston said that this “traumatic event was central to the breakdown of the relationship.”
“I simply had refused to be bullied into giving shares away for nothing to satisfy his share demands,” he said.
He added that he thought Mr Belokon thought he had made the wrong move in the way he had invested and continued: “He appeared to be resentful of me as if I had somehow deprived him from making a much better investment.”
He said Mr Belokon then informed him that he was resigning and alleged that £24m had been wrongfully taken out of BFC into the Oyston Group of companies.
“This is echoed in the petition with the allegation of misappropriation. I refute those allegations,” he said.
He said he had put large sums of money at risk over a period of 25 years and in the process had developed the assets of the club from a bankrupt state in 1987 to a net asset value of £38.7m in the year ending 2016, though that value was rapidly coming down.
He said that over the 25 years club losses were funded by his companies.
Focusing on the allegations that he wrongly helped himself to club money, Mr Oyston said that over a period of 25 years his service company, Zabaxe, had received no return on its interest-free lending to the club or for its services until the £11m at the heart of the case was paid to it.
“I never drew a salary or dividend from the Football Club or the Parent Company for the first 25 years – now a period of over 30 years,” he said, though he added: “There may have been an occasional payment when BFC sold a player for a significant sum, then I would take the money out of the club, ringfence it and feed it back when needed. This was to slow down the club’s voracious financial appetite.”
He told the court he had paid club bills through Zabaxe and organised group company services free of charge because the club did not have resources until it reached the Premier League in 2010.
He said that the one-off payment of £11m had secured Zabaxe’s and his continued support for the club in the future.
Describing the tax implications of the payment he said: “The £11m paid to Zabaxe after paying tax of approximately £2,694,699 left £8,305,301. This transaction saved £466,046 and BFC would have had to pay this sum as part of its tax payment to the Inland Revenue.
“This was a saving to the Oyston Group and if not to BFC specifically although BFC benefited over many years from Zabaxe’s financial support and will benefit in the future if required.
“This money remains within the Oyston Group either in cash or assets and is always available as it was before, if and when BFC requires further funding. Zabaxe’s monies, Oyston Group and my personal monies were always available during the first 25 years of my tenure. This was a barren time financially for both the football club and The Parent Company when both these companies were under constant financial pressure and struggling to survive.”
Reiterating his philosophy on football club investment he said: “As I have already mentioned within this witness statement investing in a football club is a vanity investment, it is not an investment made in the expectation of receiving any return by way of a dividend. I do not know when BFC last paid a dividend. No dividend has been paid since I became involved in the club and as far as I am aware the football club has never paid a dividend.”
He said that Valeri Belokon’s company, VB Football Assets, was in December 2010 offered repayment of Mr Belokon’s capital investment along with a £2m dividend and on-going dividends.
However, he said Mr Belokon had put a price of £24,150,000 on giving up his shareholding and surrendering his interests.
“I considered that to be an absurd offer and a vast overvaluation of VB Football Asset’s minority shareholding,” he said.
“Based on the contents of that offer it was obvious that there was an unbridgeable chasm between Valeri Belokon’s valuation of his interest in BFC and consequently that offer was rejected as inevitably it had to be.”
He alleged that after the offer was rejected he believed Mr Belokon had “systematically set about trying to destabilise the football club” and in the process had attacked him and his son Karl in the media.
He also accused him of orchestrating incidents such as fan protests and marches outside the grounds and outside Karl’s home.
“I believe Valeri Belokon has encouraged all of these activities and in offering that encouragement he was acting out of a personal animosity towards me and Karl Oyston in the hope he would force us to pay VB Football Assets a greater sum for its minority interest in BFC than it is actually worth.”