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Powerleague Set for CVA

Powerleague Set for CVA

Powerleague looks set to become the latest well-known brand to launch a CVA (Company Voluntary Arrangement) to help secure a long-term future. The CVA will seek to secure concessions from creditors, in particular landlords, and will reportedly result in over 100 job losses and the closure of 13 venues.

A company statement said: “Without an approved CVA, Powerleague will not be able to secure the additional funds that the business needs and will most likely result in the company going into administration.”

The Restructuring Kings

The recent appointment of Christian Rose and Mike Evans as CEO and CFO appears to have instigated this restructuring. The pair were responsible for turning around the All Star Lanes business.

Christian Rose is adamant the changes are necessary, saying: “These significant changes are essential to a sustainable future for Powerleague, and I am committed to our long-term turnaround plan.”

What Went Wrong?

It’s hard to examine Powerleague in detail because of its private status. It has been reported that the ‘Beast from the East’ weather front was a contributing factor to poor profits this year, but the problems are likely to be more systemic. The combination of factors leading to this are:

  • A fierce competitive environment – there are a lot of businesses operating in the 5-a-side pitch rental and league market, and the barriers to entry aren’t high. Anyone can set up a local league by renting a space and recruiting teams. Some of these small incumbents deliver an exceptional experience, like the Marylebone-based Ultimate 5 a Side. It makes sense that people with local connections can set up superior experiences.
  • Organisational problems – Powerleague may have taken their eye off the ball regarding management; a quick glance at its Glassdoor profile shows some poor reviews from staff

There is Hope

If creditors agree to a CVA in October, they will do so knowing that with the new team in place the business is taking serious steps to stabilise. This, coupled with the continued popularity of 5-a-side football, the Powerleague brand name and current penetration, means the future has some promise.

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