Gillingham FC

An exploration of Gillingham FC's stadium and finances

Gillingham FC were in the equivalent of the Championship from 2000/2001 to 2004/05; League 1 from  2005/to 2007/08; dropping to League 2 in 2008/09; getting promoted straight back uo for the just the one season to League 1 for 2009/10; and then back to League 2 for 2010/11 and 2011/12.  In both these last two seasons they have finished jsut outside of the play-offs. 

During the Championship years, three of the four stands at the Priestfield Stadium had been demolished and rebuilt, whilst the Brian Moore Stand has remained a temporary scaffolding stand for away fans since 2004.  

By May 2008, Gillingham FC were £13MM overdrawn, a combination of paying for Championship football, and the rebuild of the ground.

The Priestfield stadium was then sold by the club for £10.1MM to Priestfield Developments Ltd, a fellow subsidiary of GFC Holdings [the parent company of the football club and the ground], funded by loans from Bank of Scotland (now HBOS) of £10.1MM.  This was though basically a corporate restructuring. The £10.1MM wasn't 'new' money, it simply reduced the existing £13MM overdraft the club had with Bank Of Scotland. So in effect, Bank Of Scotland started off owed £13MM, lent £10.1MM to Priestfield Developments, which paid Gillingham FC £10.1MM, which repaid Bank Of Scotland £10.1MM. So Bank Of Scotland had a £3MM overdraft at Gillingham FC and a £10.1MM loan at Priestfield Developments, the loan secured on the ground. 

In August 2011, the stadium was sold back to the club for £1.05MM. Priestfield Development's filings state that mortgages over the property have now been satisfied, and the club now has legal charges over the ground due to another company, Three Directors Limited.  Barclays Bank also now have charges over Gillingham FC's assets.  The joint owners and directors of Three Directors Limited just happen to be the same three directors of Gillingham FC (owner Paul Scally, Michael Anderson, and Michael Quarrington).

My guess is that when the Bank Of Scotland overdraft came up for renewal in May 2011, the group said it would not be able to repay / renew it unless the £10.1MM loan was reduced or written off - the stadium at this time perhaps valued at £1.05MM. (If Bank Of Scotland called in the mortgage/ overdraft and owned the stadium, they perhaps think its value is just £1.05MM).  So Bank Of Scotland then say if the club can repay the overdraft and Priesfield Developments can sell the stadium for £1.05MM, they will walk away - better to lose £9MM then lose the full £13MM they were owed.

So what has then perhaps happened is that Three Directors Limited have scraped together £1.05MM, loaned this to Gillingham FC, allowing the club to buy the ground, and the club now has secured a new overdraft from Barclays. Bank Of Scotland lose £9MM. [Bank Of Scotland are of course now tax-payer owned].

So Gillingham have had a run in the Championship, have a fairly decent rebuilt ground (for home fans), of which £9MM has been paid for by the taxpayer. Scally taking a nice 6 figure salary out of the club all the while.

In 2012, Scally's hopes of a stadium sale, and move to either Chatham Docks or Mill Hill with an enabling development have been scuppered, with the proposed Docks redevelopment including a supermarket, but not a football ground, and hence the Mill Hill area would not also get a supermarket and retail facilities, the key to a move. In rather a pithy put-down, the Docks developers said "He [Mr Scally] was estimating that would be in the Premiership within two years, and actually rather than going into the Premiership they've gone down a league. I understand the attendance is about 5,000 so it can't be a capacity issue. I don't understand the reason now for a complete relocation."

By May 2011, the club's overdraft had increased to £3,683,424 - with interest charged at 2% above base rate.