How the Östersunds fairy tale turned into a nightmare

How the Östersunds fairy tale turned into a nightmare

Contrary to what some people think, the city of Östersund isn’t actually in the Arctic Circle, but almost 400km to the south. Nonetheless, it is fair to say winter there is pretty dark. By the end of November, the sun is setting a little after 2pm. If you’re an Östersunds FK fan, you also have to prepare for five months with no football as Sweden takes its long winter break.

After the club’s darkest day – 5 November 2019 – saw the lead figure behind its incredible rise sentenced to three years in prison for fraudulently sending public money into the club, this winter, fans are left nervously waiting to see whether there will be any football at all in town next spring.

Two years prior to that day, ÖFK had been in the midst of a Europa League group campaign, vying with Athletic Club for top spot and preparing to send Hertha Berlin out. If you hadn’t heard of them then, by the time they played Arsenal the following spring in the round of 32, only those deliberately avoiding football could fail to have read their remarkably uplifting tale.

Elements of their rise remain genuinely moving, such as Graham Potter recalling to the BBC how he arrived at a fourth-tier club in 2010 with crowds of around 500 – many of whom wanted their team to lose – and how the parents at his child’s nursery joked to his wife that, upon finding out they had moved to Sweden for Potter to coach the club, they family should go home. Fraser Nelson, editor of the Spectator, felt inspired enough to pen a column about the “miracle of Östersunds”, which “I suspect will one day be made into a Moneyball style film”.

The club’s focus on cultural activities to foster team spirit, plus community and charity engagement to anchor its positive identity, provided food for thought for anyone used to the Premier League bubble awash with its egos and cash. “It’s not about the money here, it’s about the other stuff,” said Daniel Kindberg, the chairman with a background in construction who financed and inspired the club’s rise. “We think it’s important to contribute to the world, to society, to help people.”

Money was indeed the central element in the case being judged at Ångermanland district court at the start of November. Kindberg and two others were found guilty of funnelling around SEK15m of public money into ÖFK between 2013 and 2017. The man who shaped the club more than any other was sentenced to three years in prison. Kindberg continued to proclaim his innocence and says he will appeal.

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The irony is that while football was heaping praise on ÖFK for being a club with strong community values, it was questions that were first raised in the local community that would cast this dark shadow over their rise.

As a former officer of the Swedish defence forces who claimed to have once been kidnapped in Stockholm and to have witnessed cannibalism in Congo, Daniel Kindberg’s proclaimed ambition since becoming ÖFK chairman in 2010 of taking the club into the Champions League was an immense target.

With his background as CEO of a property venture backed by the giant Peab construction company (who he also worked as a regional manager for), by the time he had also become head of the city’s municipal housing company in 2014 and sitting on the board of the local ice hockey club, it was clear Kindberg wielded great power locally. There was also potential for that power to be exploited via conflicts of interest. 

It is with that in mind that Linda Hedenljung, a journalist at the local Östersunds-Posten newspaper, flagged a few questions in 2014 about a strangely expensive property deal Kindberg had committed to in his capacity as head of the local housing company. There was no connection to the club, which at the time was in Sweden’s second tier and aiming for the top flight. A couple of years later, Hedenljung managed to obtain a tranche of Kindberg’s work emails from the housing company and was struck by the fact that ÖFK seemed to come up in most of the messages he sent.

While nothing had emerged by this stage that was obviously improper or illegal, the question of how the club was putting its finances together had become unwanted background noise accompanying its fairy tale rise. Hedenljung and her colleagues were receiving threatening messages, ordering them to back off.

The puzzle continued to grow for anyone looking into how a path to the top of the Swedish game could be plotted for a club from a small town in a remote region with a passion for cross-country skiing – where a relatively limited economy made local sources of sponsorship scarce.

ÖFK may have prided itself on recruiting players discarded elsewhere, but they didn’t work for free. Neither did Graham Potter. For all his incredible achievements, the fact he seemed to earn some revenue from one of Kindberg’s companies raised eyebrows, as did Kindberg sponsoring the club via both his own business and the public housing company he headed. A highly lucrative deal signed with the Libyan government in 2014 to train 250 young Libyan footballers per year in Östersund seemed a sensational bit of financial planning, but it never came to fruition. 

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In 2016, ÖFK had a revenue of SEK44m (around £3.5m) which was a pittance compared to the sides they would compete against in the Europa League a year later. Malmö’s revenue at the time was estimated at SEK500m, and AIK’s around SEK150m. The club aimed to increase their turnover to SEK65m, which Kindberg said was enough to become Swedish champions. By Premier League standards that’s nothing, but by Östersund standards, it remained a suspicious level of wealth. Hedenljung was hearing a rumour that in order to get a contract for public work in some parts of the city, you were being told you had to sponsor the club. 

Ironically, around the same time ÖFK were enjoying the Europa League and getting a welcome injection of cash from UEFA coffers in late 2017, the start of what has been called Swedish football’s greatest scandal was brewing away from the big lights of Europe’s great football stadia in the offices of the Swedish tax authority.

The tax authority had launched an analysis of the country’s removal businesses in an attempt to crack down on shady practices. One company that got flagged up was in the Östersund area, which had somehow spent around half of its revenue in the previous two years sponsoring ÖFK – a total of SEK5.5m. It didn’t seem to have enough employees to earn the kind of money it was declaring. 

Just 55 days after the zenith of his project with ÖFK, a 2-1 win against Arsenal at the Emirates in February 2018, Kindberg was arrested. He later went on trial accused of operating a scheme for years in which he would use the municipal housing company he headed to pay fake invoices to the Peab construction company, which in turn paid fake invoices to the removal business for made-up work before the money went into ÖFK in sponsorship. Kindberg proclaimed his innocence throughout, denounced the verdict after it was delivered for containing “pure fallacies”. He is expected to appeal. 

ÖFK’s new club management have faced a scramble to get the club’s finances in order without their former backer. The money that had been earned from the Europa League run and some transfers was being eaten up as salaries were increased in 2018. The club operated at a loss of SEK24m in 2017/18. During 2019, debts with the tax authority, the local council for leasing the stadium, a bank, and even with Kindberg himself were becoming apparent. 

Manager Ian Burchnall has said that the off-field problems took their toll on his players during the 2019 season, and after losing just one of their opening eight Allsvenskan games, ÖFK lost nine of their final 11 matches of the season to finish a few points clear of the relegation zone in 12th. 

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The club launched a funding drive with the aim of raising SEK20m by the end of 2019 to clear its debts. By November, half of that figure had been raised, with sponsors contributing and donations coming in, including from Graham Potter.

Carrying debt can be hugely problematic under the strict licensing requirements for Swedish football clubs. The Swedish Football Association will meet at the end of November to decide which clubs will be licensed to play next year. While the ÖFK hierarchy say they are confident of meeting all the requirements, Hedenljung says it remains touch-and-go.

Questions will be asked of how the club aims to fund itself next season before permission is granted. ÖFK’s big idea is getting locals to gift loved ones club shares for Christmas, but these shares may or may not be worth anything at all next year. Controversially for many in the rest of Sweden, the football authorities have not punished ÖFK for the fraud Kindberg has been sentenced for as the offences came too long ago to meet its statute of limitations for disciplinary action.

As if the club didn’t have enough problems, they are also currently appealing a transfer ban and €4m compensation award to SD Huesca arising from the sale of Saman Ghoddos to Amiens in 2018, when Huesca claimed to have already signed a contract with him.

Tensions are running high between the club management, fans and sponsors over the current plight. Calls have been made for the club to do more to distance themselves from Kindberg, who has been regularly attending training and even sitting in on team meetings in recent months, claiming at times he is there to watch his son who is in the youth ranks. Others say it would be wrong to cut him off before his appeal is heard.

“Local people who followed the club are really struggling to judge whether their incredible memories should be spoiled by these developments,” Hedenljung says. Either way, Östersunds FK face a real battle for survival. If a film is made about the club now, it’s difficult to say which genre it would fall under. It doesn’t feel like a fairy tale anymore.  

By Dan Billingham @D_Billingham

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