Dale are hovering on the brink of oblivion
Chief warns club will ‘run out of money’ without investment
COME 5pm on a Saturday evening, Sandy Lane is a sea of blue.
Within seconds of the full time whistle, Rochdale AFC supporters flood the streets surrounding the club’s Spotland stadium.
As they make their way to their cars, pubs and chippies, they discuss the game they have just watched.
It’s a scene that has played out on the streets of Rochdale for more than 100 years.
But that may not be the case for too much longer.
Last week, Rochdale’s chairman warned that the historic club is on the brink of liquidation.
Issuing a desperate plea, Simon Gauge said the club needed to find a new investor by the end of March, or there is a ‘very real threat’ it could fold.
He said he had been trying to secure new investment for the struggling club - who were last year relegated from the Football League for the first time in 102 years - for the past 14 months, but had failed to get a deal over the line.
Mr Gauge, a former airline pilot who has lived a mile from Rochdale’s ground for the last 20 years, became chairman in 2021 and oversaw the club’s move to becoming fan-owned the following year.
He has been ‘subsidising’ Rochdale the past few months, in total loaning them £566,000.
But despite cost-cutting
exercises, he says it has now ‘run out of cash’. Speaking to the Observer, Mr Gauge described the situation facing Rochdale as ‘desperate’.
“If a number of things don’t happen, we run out of cash at the end of March,” he said. “That’s the hard-line fact of where we are.”
The Dale are currently 13th in the National League, three points clear of the relegation zone, but could face a 10-point deduction if they enter administration.
The club has a long track record for developing young talent before selling them on to bigger clubs.
The profits helped to keep the club on a steady financial footing while similar-sized clubs faltered.
Mr Gauge said Rochdale had hoped to find the funds to see out the season by selling one of their most promising talents during the January transfer window.
The player, who he
refused to name, caught the attention of Premier League and Championship sides but Mr Gauge said they withdrew their interest after Everton and Nottingham Forest were charged with breaching Premier League profitability and sustainability rules. That [the sale] did not happen, even though it seemed to be on the cards all month,” he explained.
“Everyone put a stop to their funding.
“If that sale had gone through, we would have the cash to get through to the end of the season, then you get season ticket sales in the summer.”
Mr Gauge said the board is seeking an investor to inject £2 million and is ‘in talks with interested parties.’
Three of four potential “viable” buyers came forward last week alone, he claimed.
However, he said the club’s ownership structure is deterring potential investors who ‘want to be able to buy up to 90 percent of the club in one single transaction’ and for the cash ‘to go straight into the club’.
He has called an extraordinary general meeting (EGM) for Thursday, March 7, where he wants shareholders to rubber stamp an emergency restructuring that would create nine million new shares.
That would make it easier for prospective owners to buy a controlling stake in the club, Mr Gauge said.
If the move is not approved, he warned that the club “will not operate beyond the end of March”.
“The issue we have at the moment is we are one of four or five clubs with fan ownership models,” he said.
“The only way to buy a majority stake in the club is to buy individual stakes. It’s not an easy way of buying a club.
“We are talking to people at the moment. They are waiting to see if this gets passed. They’re saying ‘you need to create the conditions for us to buy it’. It’s a bit of a chicken and egg situation at the moment.”
The stark warning over the club’s future has prompted fears of a repeat of the demise suffered by Rochdale’s neighbours, Bury, five years ago.
The footballing world was left stunned when the Shakers were thrown out of the EFL in 2019.
However, Mr Gauge was keen to stress that Rochdale’s financial woes were different to those faced by the Shakers.
“This is very different to Bury in that the club is not a basket case with massive debts,” he said.
“In football terms, we are pretty well-run compared to the majority of clubs.
“The problem is we have run out of cash to operate the club and there’s no way for us to raise it. If you solve that issue you have a pretty viable club.”
Just four years ago, Rochdale were playing in League One and had taken Premier League Newcastle United to an FA Cup replay.
Since then, the club has been relegated twice and been plagued by financial uncertainty off the pitch.
It first became a fanowned football club in August 2022 after a longrunning dispute with potential owners, Morton House, was settled.
The Morton House deal had been dubbed a ‘hostile takeover’ by the club’s hierarchy and was eventually rebuffed, amid some bitterness.
But, in December 2022, Rochdale’s ownership warned that the club could lose a total of up to
£1.2m for the financial year ending in June 2023.
A deal to provide the club with significant new investment fell through back in December.
Despite Rochdale’s financial woes, Mr Gauge remains bullish about the prospect of finding an investor for the club, highlighting its benefits, including the fact it owns its Spotland home.
“Pound for pound, it’s the best investment in football at the moment,” said Mr Gauge. “We are one promotion from getting back to the EFL.
“If that happens, that would be something like a
£1.5 million increase in revenue. This is not a Bury or Macclesfield situation where there are huge debts.
“Because we are a fanowned club, there’s nobody trying to cash in here. You buy the club for £2 million and the club has £2 million in the bank the next day.”
Mr Gauge said the fact the board opposed the Morton House takeover showed it was intent upon finding the right owner to take the club forward.
“The intention is to find a good investor that is going to be good for the long-term future of the club,” he said
“There’s a certain amount of risk with whoever you sell to. It’s who is prepared to put the money where their mouth is. If it was somebody we had doubts about, it’s difficult because it’s do you sell or let the club go bust?
“We are confident that if the EGM resolution passes there will be a good investor out there.”