North West football club’s losing streak continues in tribunal
Football clubs that have hit hard times are nothing new. The prospect of promotion or relegation will feature in a lot of clubs’ financial forecasts but should the relegation from the Premier League be classed as a Material Change of Circumstances when it comes to rating?
This was the question posed when Wigan Athletic Football Club argued that several changes had occurred after the ‘Latics’ dropped down not one but two English leagues.
These are not the usual milestones that clubs want to highlight but WAFC argued that MCCs had occurred due to:
- A change from a use for predominantly broadcasting purposes
- A change of use from use as a Premier League Club stadium to use as a Championship Club stadium, with a subsequent change in use to a League One Club Stadium
- A change in the matters set out in Schedule 6 Paragraph 2 (7) (d) to the Act, including a change in the mode or category of use, a change in the physical enjoyment of the property and a change although not affecting the physical state of the locality is nonetheless physically manifest there
Both parties invited the Valuation Tribunal for England President to decide the legal point on the basis that the appeal property was a football stadium with only one possible hypothetical tenant willing to pay a rent for the right of occupation. However, the precedent of Tomlinson (VO) v Plymouth Argyle  was distinguished, as the 25,000+ capacity DW Stadium is shared with Super League Rugby League team, Wigan Warriors, who use the same facilities as the football club.
The President heard the hereditament itself had not altered between the list entry and the material day. The physical state of the stadium was also exactly the same as it was during Wigan’s Premier League heydays. He didn’t accept the closure of a ticket office and the loss of some seats covered by advertising banners as physical changes as they were still available for use. Another interesting point raised centered on the revenue the football club received from broadcasting rights in the Premier League which represented more than 80% of its income. This fell to 23% in the Championship and to around 13% in League One.
Despite the media exposure and interest much reduced after both relegations, physically the media centre and broadcasting facilities hadn’t changed. If the club’s fortunes turned around, the media facilities could be brought back into full use. The President concluded that this loss of revenue was an economic factor and could not be considered until the next revaluation.
The Club’s further argument was that relegation was a matter affecting the physical enjoyment of the property or was a matter that is physically manifest in the locality. Fans may agree, however, the only thing that was different was loss of revenue, which also had to be considered economic. Attendance levels could be affected by a number of factors including the type of match, the attractiveness of the opposition, the opposition’s travelling fans, even the weather.
When the club was in the Premier League, there were 346 non-match days. On these days there would be no observable difference at the ground at all, unless Wigan Warriors were playing at home. The President concluded that the appellant had failed to establish a causative link between a relevant paragraph 2 (7) matter, and a reduction in rental value, and that relegation in these appeals was not a “material change in circumstances” in accordance with the legislation and case law. He dismissed the appeal. Valuation Officer 1 – Wigan Athletic 0…
And of course those clubs that have successfully achieved promotion will be relieved, as they would arguably be looking at increases in rateable values!
This week saw business rates rise again, with the multiplier increasing to 50.4p in the pound – a hit many companies could do without.
It is looking like the Scottish Government is to follow in English footsteps by making business rate revaluations more frequent.
The appeals centered on two business rates avoidance schemes where the properties were vacant and liable for unoccupied rates.