Further east than Orient, there's a storm a-brewin'

One of the oldest names in Dutch football is in serious trouble, and this calls into question a part-owner of a club in this country.

Considering the tragic way in which it started, the return of Leyton Orient to the EFL in 2019 can be treated as one of the recent success stories of the lower divisions. The death of Justin Edinburgh shortly after their return after two years adrift in the National League was a shock to the system for the entire game, but Orient have kept a form of legacy in their performances over the five years since.

Readjustment to life back among the top 92 had bumps along the way. The 2019/20 season began with the shellshock from Edinburgh’s passing still ringing in everybody’s ears, and there were points throughout the first part of the season when they flirted with the relegation places at the foot of League Two.

But they found their balance. Then came two years of relative serenity in mid-table, followed by promotion as champions and holding their own in League One this season. Crowds are good. The average home attendance this season has been just over 8,000. For once, the future of Brisbane Road doesn’t seem to be immediately in jeopardy. Steady progress on the pitch, relative harmony away from it.

Except it’s never quite that simple, when it comes to Leyton Orient. The last set of company accounts, covering the 2022/23 season, don’t make for pretty reading. The club lost £3.9m that season, a substantial increase on the £2.3m lost a year earlier. In total, the club’s total liabilities amount to £14.5m, though the accounts are very clear about the owners’ intentions to continue to fund it. This, of course, doesn’t mean that losing the lion’s share of four million quid a year is a good thing.

And there’s something rumbling on in the background at the club for a couple of months now which is very much de nos jours; multi-club ownership. It’s common to think of this form of club ownership in terms of Manchester City or Barcelona spreading their tentacles across the world, hoovering up as many clubs as they’re legally entitled to buy in order to feed their production lines, but it’s not always like this.

There are several multi-club groups which have less than a sprinkling of stardust about them such as Midas in reverse speculators 777, who seem to cause some degree of havoc, not only where they pitch up but even now where they pass by. It’s clear that some have spotted a gap in the market, an opportunity to buy up little fiefdoms of their own in which the best talent is funnelled to the most appropriate—let’s face it, ‘wealthier’—destinations, and quite possibly for very little.

You might not immediately think of Leyton Orient, the little guys from East London, as being a cog in a greater wheel, but it certainly seems that this is what is being attempted. The biggest shareholder is, of course, Nigel Travis, the Dunkin’ Donuts guy, a man with enough wealth to be able to underwrite his fair share of those losses.

But this isn’t about him. This is about the club’s second largest investor, Common Group PLC. Common Group have their finger in several different pies, and their shareholding in Leyton Orient is part of Common Sport. They came into the club in 2021, when Kent Teague cancelled £2m worth of shares in order to facilitate the deal.

In December 2021, Common Sport bought the part-time Belgian club Patro Eisden, or, to give them their full name, Koninklijke Patro Eisden Maasmechelen. This takeover seems to have been a success. Patro Eisden were promoted from the Belgian National Division One—the third tier of the game in Belgium—and their first season in the Challenger Pro League is going pretty well, with the club in 6th place in the table, the final play-off spot, and essentially needing a draw from their final game of the season to ensure a shot at promotion to the Jupiler Pro League, alongside the likes of Club Brugge, Anderlecht, Union Saint-Gilloise, Genk and Gent.

But their latest move in the multi-club market has hit a not-inconsiderable snag. SBV Vitesse Arnhem are the second oldest football club in the Netherlands. They were five times the Dutch champions between 1898 and 1915, and won the KNVB Cup as recently as 2017. But the club was suddenly plunged under a very cold shower indeed when their owner, the Russian oligarch Valeriy Oyf, had to depart in the spring of 2022 on account of Russia’s invasion of Ukraine.

It was confirmed in September 2022 that Common Group would be buying into the club, which was purchased in de facto fire sale for the low, low price of a single, solitary euro. It was reported that Oyf had waived the €155 million debt the club owed upon his departure, but the fact that this money had into Vitesse over a dozen years told a story of its own.

It later turned out that Roman Abramovich was the source of the majority of the money loaned to the club, which came as no surprise whatsoever to anyone who’d been paying attention to the relationship between Chelsea and Vitesse a few years earlier. Any new owners of the club would clearly have to provide proof of forward funding.

On the pitch Vitesse’s 2022/23 season started slowly, but the team eventually rose to 10th place in the Eredivisie. But the situation regarding the ownership of the club has become increasingly complex. It took the KNVB’s licensing committee until the middle of February 2024 to reach a decision, and when they did it was not good news for Common Sport. The application was rejected, and the reason was expressed with what we might consider customary Dutch forthrightness:

There is no evidence that the Common Group has equity capital and it is not clear whether the Common Group has investors. No insight has been given into the money (to be raised) from the Common Group.

They also fined the club €100,000 for having hidden the fact that they’d been de-banked; or in other words, had accounts closed or severely limited because they pose a financial, legal, regulatory, or reputational risk to the bank that they’d normally utilise. This state of affairs had gone on for seven months. Again, it should come as no surprise whatsoever that this is an extremely bad thing.

Meanwhile on the pitch, Vitesse have tanked this season. At the time of writing, they’re not quite down yet. They’re bottom of the table and eight points from safety, with four matches left to play. But we should be realistic about this. Relegation is almost a certainty. For Vitesse Arnhem, next season would be the first time in 35 years that they’ve played below the top flight. Where any dramatic improvement on the pitch for their final matches might come from is anybody’s guess. They’ve only won four of their first 30, after all.

But hold up a moment there, because something in this sequence of events doesn’t quite add up. After all, we may shake our heads and roll our eyes at Common Group not having any money, but that does lead to the question of… if that was the case, what was the plan here? The extent to which Vitesse needed forward financial funding was absolutely clear from the most cursory skim-reads of their history. How, exactly, was this to be funded?

The suggestion was that Sam Helmy, formerly of the Common Group, had found investment from Egypt, but that the proposed investors later got cold feet. Common Group’s Coley Perry claimed a couple of weeks ago that “I have verbally agreed to a proposal that we have been working on together for more than a month”, but it’s now been two months since the KNVB issued their rejection and the end of the season is fast approaching.

Preparing for life in the Eerste Divisie for the first time in a very long time will require a degree of stability that the club absolutely does not seem to have at the moment. Meanwhile, a boardroom battle now seems likely, with patience starting to run out.

In the meantime, Common Group are stalled on a 24.9% ownership of the club, the highest shareholding that they can have before coming under the jurisdiction of the licensing comes into play. Specifically, the KNVB were understood to have taken issue with a bank guarantee of just €10m for the next five seasons, a modest sum indeed, when you consider the losses they’d run up over the years.

Of course, it’s perfectly reasonable to argue that this is of little concern to Leyton Orient. They have Nigel Travis, and he is a fan. Kent Teague remains a shareholder, and he remains committed. They should be okay. But this whole farrago does tell us something about the many potential pitfalls of a multi-club ownership model which might not necessarily be the shortcut to riches and a tasty invitation to European Super League v2.0 that its keenest proponents might believe to be inevitable if they chuck enough darts at the board.

The sensible thing to do would be for Common Group to walk away from this absolute money pit and save themselves millions in future losses. But in a business in which there are a far greater number of clubs making a loss than there are making a profit, the very interconnectedness of multi-club groups starts to look more like a drawback rather than a benefit.

How might the ripples from one club going wrong spread out to affect others? If the owners find that they need to prioritise their funding, might innocent parties find themselves being detrimented by decisions being taken at other clubs over which they have no influence?

Vitesse Arnhem are a big undertaking, and even if Leyton Orient have the wherewithal to not be overly fussed by any of this nonsense from abroad, then perhaps we should spare a thought for the supporters of the Dutch club, facing relegation and an extremely uncertain future. No supporters anywhere should be put through this, and certainly not so that some American can stick his finger into yet another pie. It certainly feels as though Vitesse are getting throughly fingered, at the moment.

With thanks to The Leyton Orientear - you can pick up a copy of The Orientear for the exceptionally excellent price of £3.30 from their website.