Shock as Jeremy Peace puts West Brom up for sale
Just 24 hours after West Bromwich Albion lost arguably their best player in Zoltan Gera to Fulham, chairman Jeremy Peace essentially put the club up for sale.
He said in a statement that he will listen to any “substantive and sensible proposals which are in the best long-term interests of the club”, including those for his 51 per cent of the club’s shares.
The reason underpinning his decision is simple: The Baggies’ need more money to compete in the Premier League and the club’s current financial model restricts the sort of payments on players that he thinks will be needed to keep Albion in the top-flight, which is of paramount importance.
Promotion from the Championship as champions may have been estimated to be worth over £50 million but that is potentially over three years and only a portion of that cash will be available for investment in the first season. Peace knows that still isn’t enough if Albion are to avoid the fate of so many newly-promoted clubs and make an instant return to the Championship.
Birmingham City and Derby County suffered immediate relegation because of a lack of investment in their playing staff and the other promoted side, Sunderland, fought relegation for most of the season despite spending nearly £50 million on players.
Peace said: “We have always tried to organise the club’s finances on a sensible and prudent basis and we will continue to do so. However, the reality is that to be successful in the Premiership a club of our size needs significantly more financial backing.
“We are now attractively placed to benefit from new investment and will listen to any substantive and sensible proposals which are in the best long-term interests of the club.”
Following their promotion from the Coca-Cola Championship as champions, Albion are due to compete in the top flight for the fourth time in seven seasons.
The club has regularly been praised in recent years for the way it has been run financially. After the release of Deloitte’s Annual Review of Football Finance 2008, Dan Jones, partner in the Sports Business Group at Deloitte, highlighted Albion as a good example of a club which has invested their Premiership ‘windfall’ wisely to create a strong financial base.
Erring on the side of caution, fundamentally, is why the club is in such sound financial shape. The club’s board has now conceded their financial prudence is not enough
Albion’s value brought a series of varying speculations, with experts suggesting figures ranging from £25 million to £60 million, given the club’s training ground, guaranteed Premier League earnings and escalating television revenues.
Peace, though, will also be aware of the shambolic and protracted takeover attempt at Blues by Hong Kong businessman Carson Yeung and the damaging effect that had on their season.
Blues chairman David Gold said Albion’s announcement was wise but he warned investors may be hard to come by, and he urged diligence over the credibility of any potential investor or new owner.
“I think people are coming to terms with the fact that clubs that are promoted to the Premier League are almost cannon fodder,” he said. “They say promotion is worth £50 million but, with increased wages, transfer fees and costs, it still isn’t enough to compete against established clubs who have the best players in the world. The Championship teams who are promoted are confronted with this dilemma.
“Albion are wise to go out and try and find an investor who can help bridge the gap but everyone is looking for investors and it may not be easy to find someone who can.
“The question is what are Albion offering in return? Are they offering shares or ownership? The likelihood is Albion will be one of the favourites to be relegated next season along with the other two promoted sides and they will be asking an investor to make sure relegation doesn’t happen, so what can the club offer in exchange?”
West Brom shareholders expressed surprise at the timing of chairman Peace's announcement.
And there is a concern over the future should Peace decide to sell to would-be investors who have little knowledge of the Baggies or English football.
Neil Reynolds, chairman of Shareholders For Albion, said: "The fact that Jeremy Peace may be wishing to sell isn't a shock, but the timing of his comments are.
"We are a bit perplexed about it, unless he's trying to see what's out there. Jeremy always said he would stay for a few years but it does look as if he's seeking a buyer.
"That's a surprise because November's AGM would have been the obvious time to try to consolidate more shares. That would make a purchase more attractive to any potential buyers. But then, we are all equal at the moment. Come November, if we are in the bottom three, we may not be as attractive."
Meanwhile, Adel Taarabt’s agent Rudy Raba claims West Bromwich have stepped up their efforts to sign the 19-year-old on loan.
The Tottenham Hotspur midfielder is reportedly keen on a move to The Hawthorns as he seeks regular first-team football and was the subject of an Albion inquiry during the last loan window.
Taarabt’s move looks all the more likely following the arrival of Luka Modric and Giovani dos Santos at White Hart Lane in the close season.