Owners of Huddersfield Town and Huddersfield Giants' John Smith's Stadium at risk of administration due to huge debts

Shockwaves have been reverberating around Huddersfield’s John Smith’s Stadium after it was revealed its management company could be at risk of going into administration due to debts running into millions of pounds.

Since it opened in 1993, the stadium – where Huddersfield Town FC and Huddersfield Giants play – has been managed by Kirklees Stadium Development Limited (KSDL). Now, “full operational control” is set to be handed over from Kirklees Council to Huddersfield Town.

The stadium is in need of between £8m and £10m worth of refurbishments over the next 10 years to address a “backlog” of maintenance issues in order to extend the stadium’s life until 2050. The bulk of this work needs to be done over five years.

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The stadium’s finances have been in peril for years with cash-strapped Kirklees Council’s cabinet supporting the formation of a Community Trust in March last year to provide a £13m bail out for KSDL’s woes. However, this never came to fruition as Huddersfield Town didn’t agree to the proposal. Now, KSDL is said to be experiencing “severe cash flow difficulties” that have been worsened by increasing energy costs.

John Smith's Stadium, where Huddersfield Town and Huddersfield Giants play their matchesJohn Smith's Stadium, where Huddersfield Town and Huddersfield Giants play their matches
John Smith's Stadium, where Huddersfield Town and Huddersfield Giants play their matches

As plans for the Community Trust were torpedoed, the council is now scrambling to find a solution to keep KSDL from administration. The council also recognises that the stadium cannot become “a source of reputational damage” or a “financial burden to local taxpayers.”

Huddersfield MP Barry Sheerman said he would be asking urgent questions to key council members regarding the future of the stadium as he wanted to “make sure this is a good deal for the people of Huddersfield and not a panic measure being done in a crisis.” He described the stadium as a “very valuable asset” to the Huddersfield community which is partially owned by the people.

And Ken Davy, chairman of the Giants who resigned from his role as the club’s representative on KSDL’s board on Thursday, said: “I was not aware that KSDL are heading for administration.”

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Kirklees councillor Cahal Burke, (Lib Dems, Lindley), said: “I will be asking questions about the management and how we have ended up in this situation. Regarding administration, it’s disappointing when you see things going down that road. It’s unthinkable that Huddersfield Town and Giants matches could have ended up being played anywhere else.

“I think there could have been more transparency in terms of what Huddersfield people have been told. You don’t want things like this coming out as a shock.”

The Council is anxious to divest itself of its involvement in the stadium although it owns 40 per cent of KSDL. The remainder is owned by Huddersfield Town Association Football Club (40 per cent) and Huddersfield Giants Rugby League Football Club (20 per cent).

Going forward, five options are said to be available; do nothing, try to continue with a community trust model, transfer responsibility to an existing leaseholder, sell KSDL, or the council becomes the operator.

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The preferred option, as recommended in a report to Kirklees Council’s Cabinet, is for Huddersfield Town to become a long-term leaseholder of the stadium with the council retaining ownership of the site.

Coun Graham Turner, regeneration portfolio holder states: “I am fully supportive on the recommendations contained in this report. KSDL has been an important part of the development of the stadium site and has over the years served the residents of Kirklees well.

“However, what was right all those years ago when KSDL was set up is now not the right way to operate the stadium complex and a different operating model should be adopted. This report sets out the preferred option and I am sure that the proposals to negotiate with the football club to become a long-term lease holder will help secure the stadium and allow it to develop and flourish in the coming years.”

The council report concludes: “This is an unfortunate situation, where the options now available are quite limited and the needs of the council need to be balanced against those of the occupiers of the stadium. Some decisions taken in respect of the stadium, at its formation and more recently were, with hindsight, not in the best interests of KSDL or of the council.

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“It is important now to seek to achieve a solution which resolves some of the historical issues and creates a potentially sustainable solution to enable professional sport to continue to be played at the Stadium, whilst not creating an ongoing liability for the council.

“A form of statutory resolution (administration) will arise if no other action is taken. The most sustainable solution seems to be to look to negotiate a revised operating arrangement with HTAFC as the major existing stadium occupier, whereby they take on full responsibility, and offer opportunity for continuing use by HRLFC. Achieving such a solution will involve the council and some other debtors agreeing to write off the historical liabilities.”

In a joint statement on the future of stadium, the council, Huddersfield Town and Huddersfield Giants, said: “The stadium is at the heart of our community. Our clubs mean so much to people across Huddersfield and well beyond. But if the stadium is going to serve the community for the future, it needs investment and a financial platform that’s sustainable in the long term. All partners are working closely together to find a way forward that suits everyone, especially supporters and future generations of fans.

“There’s a lot of detailed and complex issues to consider and a range of options open to us. But all partners are committed to maintaining the stadium as the heart and soul of Huddersfield’s sporting heritage. Achieving such a solution will involve the Council and some other debtors agreeing to write off the historical liabilities.”

The matter will be discussed at a meeting of Kirklees Council’s Cabinet at Huddersfield Town Hall on Wednesday, December 21.