24th February – D-Day for the O’s

On the 27th January 2009 Matchroom Sports made Leyton Orient an offer it literally can`t refuse.

If you`re not sure of the details of the offer by now, then hold-fire for a bit and all will become clearer further down the article.

The notion was forwarded to shareholders in the form of a letter dated the 27th January 2009. Shareholders then had 28 days to reply either in favour or against.

The outcome is seemingly a formality as Barry Hearn is a majority shareholder in MSL and LOFC and is also a Director of both entities.

On the 30th January 2009 the Leyton Orient Fan`s Trust issued a statement that they have sought legal advice on this matter and raised a number of concerns that are listed below and that a halt should be called to proceedings.

1. The proposal removes the link between the club and ownership of its ground. While Barry Hearn remains owner of Leyton Orient at the time of writing, any future sale of the club would place Orient in the same difficult situation that the likes of Crystal Palace or Oxford United have faced in recent years, where the previous owner holds an enormous – and usually negative – influence over the financial wellbeing of the football club.

2. The proposal would leave Leyton Orient with no certainty as to its future in the London Borough of Waltham Forest, whereas at the moment it has over 990 years remaining on its current lease from the local council at an annual rent of just £1.

3. The proposal contains no information as to the financial sustainability of Leyton Orient as a Football League club once the £2.6m has been spent (which, based on the current annual deficit, would be in the next two to three years).

4. The proposal makes no reference to what plans, if any, the club has in place for relocating (either to an Olympic stadium or elsewhere), yet refers to ‘the sale’ of the ground in the future.

5. The proposal comes at a time when property prices are at a low at the beginning of a period of economic recession, with no indication as to the possible value of the land once any ground relocation takes place (say, in approximately five years time when a possible Olympic stadium move could take place, and when hopefully the property market has recovered). Given that the land in the four corners of the ground sold for £7.35M to Bellway Homes in 2003, and that Hearn’s consortium paid £1.5m and £1.25m respectively for under croft space in the West Stand (2005) and the land behind the North and South Stands (2006), a value of £6m for the entire ground seems incredibly low for what it could be worth for potential development.

6. The proposal allows for 50% of the profit on ‘any future sale’ of the ground during the term of the lease to come to Leyton Orient; if the ground remained in Leyton Orient’s name, 100% of any future sale would come to the club and Matchroom’s loan could be repaid from that.

Since the original instructions sent to its member by the Fan`s Trust on the 30th January, the Trust issued another plea on the 5th February to Barry Hearn to enter into discussions on the future of the club.

Despite the good work laid out by the Fan’s Trust, so far there has been no further comment from Barry Hearn, Matchroom Sports or Leyton Orient Football Club on the matter.

The 24th February deadline looms ever closer.