Argyle do not need to sell star players amid mounting losses
Supporters were told at a fans' forum at Hone Park that Argyle were forecast to make operating losses of £10.6 million over the 2025/26 campaign.
Paul Berne, who began work as Argyle's chief executive officer at the start of January, spelled out the financial challenges facing the club in a slideshow presentation.
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He told the fans' forum that despite the expected operating losses, which came after a player trading surplus of £600,000, Argyle would have a similar football budget next season to this one of around £10m.
That was based on the club still being in League One and would increase should the Pilgrims make it into the play-offs and then be promoted back into the Championship a year after being relegated.
Argyle's owner and chairman Simon Hallett told supporters they were not actively looking to sell players but added: "If somebody comes along and offers us a crazy amount - a decent amount - for any of them then we will consider selling them. That's the model."
Over the last 12 months, the club has needed £20m in funding to cover losses, with £15.3 of that coming from shareholders - mostly Hallett - and £4.7m from transfer income.
A wide range of other topics were discussed during the fans' forum, but the financial challenges facing Argyle and the need for a new investor were the main talking points.
Afterwards, Hallett answered questions from Plymouth Live's Argyle reporter Chris Errington in the boardroom at Home Park.
When Argyle fans see an operating loss of £10.6m is going to be made this season they will be concerned. How concerned should the fans be about those figures?
I think they should be concerned about the state of football, that's the real thing. I don't want to continue funding a football club that is losing £10m a year.
Now, don't forget the cash losses are much less than that, and some of the actions we are taking will reduce the cash losses for next year, so it's not going to be £10m a year losses, or £6m a year losses.
We have value on the balance sheet so at some point we will get the right offer for a player but we literally have been over the budgets today and there is nothing in the budgets for player sales - nothing.
Just make that absolutely clear, but as ever if the right bid comes along for any player we will sell them. Now we are lucky that a number of our more valuable players have long contracts, which means we don't have to sell.
One of the problems with player trading is you get this position where they are worth zero at the end of the year and they won't extend their contract, so you have to sell them if you are going to capture that value. Otherwise, that value you forego is basically the yearly cost of a player.
The problem with the player trading model is you are under such pressure to take X-amount of pounds that you get for a player and put it straight back in the budget whereas what you should do is build up a reserve.
I would like us to get to the point where we had - and I don't think it's going to happen in my lifetime - a well run football club, like any well run company where revenues and costs are volatile, and you have reserves so that when stuff goes wrong you can dip into it.
Whether we will ever be able to get there I don't know but in an ideal world that's kind of what would happen.
Can you summarise where you are at in the search for a new investor?
We are still talking. We have constantly got people who appear to be interested and it just fails to come to anything, but the reasons for failure are not the price, it's not that I'm holding out for anything.
We are incredibly flexible about the structure of a deal. I think it will end up being a very good price for any investor. If I was a billionaire I wouldn't want to be selling.
I do think it's an interesting time to be buying a football club because I think we are within sight of a solution to the financial problems (in football) but I suspect that we will have sold the club before then. The next person to own the club might actually make some money out of it.
A couple of years ago it felt as though it would be reasonably straightforward to find a new investor for Argyle but it has not turned out that way has it?
Don't forget, we lost a year in conversations with a group that we eventually pulled the plug on, so we have only been at it again since basically the autumn.
Again, we have talked to people. The market has changed a bit. It has gone from what I will loosely characterise as wealthy people looking for something fun - a bit like me - and not being too bothered about the money that it costs to make it fun, and a success, to people seeking a financial return.
So much more consortiums, much more private equity groups, much more investment groups and that changes the dynamic a bit. I don't want to sell to a private equity group, for example. It just restricts the number of people, but there are still people around looking.
You said during the fans' forum you are 'picky' about wanting to make sure you find the right new investor for Argyle. How strongly do you believe in that?
It's so much more important than the amount of money - the right person, somebody who can help the club, who understands football, who can bring resources other than just money for example, but who isn't going to then sell the club to the highest bidder. Somebody who is prepared to take on the stewardship role.
How important is to you, to your legacy at this football club, that you pass it on to the right person?
Exactly, I care about my legacy here. Foulston Park, I think, will be part of my legacy, to the city not just to the club. I would hate to be 85 years old, on my death bed, and find somebody has turned Argyle into something I loath. I would hate that.
So how do you prevent that from happening? By doing your due diligence?
By being careful, by doing due diligence and making sure people understand what it is. I have been very clear to our investment bankers, 'If you can prove to me the person who wants to buy it is perfect and they want 100 per cent of the club now and me to leave then I will do so.'
But perfection is really hard. So the ideal kind of transaction is actually one that James (Brent, Argyle's former owner and chairman) did with me, where you get somebody on board, they finance the growth and eventually you say 'Okay, you take the lot' and the club pushes on.
So if it's somebody who seems to be the right person but I stay, for example, as a significant minority (owner) with influence then I think that would be good as well.
We are never going to take somebody who just appears to be a kind of rogue, but just happens to have a whole bunch of money because it works for a while and then it doesn't.
How much longer are you prepared to keep putting money into this football club?
Not much longer. It's not the threatening the livelihood of my family, my kids are taken care of, but I don't want it continuing to be a drain on my resources basically. I'm close to the end.
Do you still enjoy being the owner of Argyle?
Yeah, I love it. The bad times make the good times good. I absolutely love it. If I was a billionaire I wouldn't be looking to sell. I would put more money in - don't tell Jane (Hallett's wife) I said that!
The level of owner-funding at football clubs that is required is now crazy. If somebody wants to buy a club and put a £1m a year in it seems fine, and if it goes wrong you can find somebody else to replace it.
Having to fund £10m a year you need a really seriously rich person if it's going to be forever and there are just not many around. There is not many around who A) like football, B) like Devon, C) like Plymouth and D) like Argyle.
You made the point during the fans' forum that you feel the club's geographical location is an issue when it comes to finding a new investor.
I honestly think so. It has got to put some people off. The lack of transport infrastructure here, there is no airport.
I do feel it's a problem. People want to come for the weekend. People will fly to Heathrow to watch a game.
Basically from wheels hitting the ground at Heathrow to getting into Home Park is six hours. You go through customs, you go through immigration and you get a bit of traffic on the M4.
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