Appendix E: Tough Love for Salisbury City?
Posted by John Beech on May 23, 2010
This is the time of year that anorakies like me start to change our data files to reflect the promotions and relegations which are about to take place officially. If you think that is already a straightforward task, barring the odd play-off final, then you are forgetting what is happening in the Conference and lower leagues.
The bottom of the Conference National table finished thus:
18 Histon – 46 points
19 Eastbourne Borough – 46 points
20 Gateshead – 45 points
21 Forest Green – 45 points
22 Ebbsfleet United – 44 points
23 Grays Athletic – 26 points
[24 Chester City - folded; record expunged]
A close run thing then, but, given Chester’s unfortunate demise, you would expect to see Forest Green, Ebbsfleet United and Grays Athletic heading for the Conference Regionals. But apparently “there are still a number of outstanding issues to be resolved and the listing my be subject to subsequent change.” Well, indeed there are, and even the FA list (1) is not up-to-date given various appeals that may or may not be made.
Here is the most glaring of the complications: Salisbury (12th; 58 points).
Salisbury’s recent troubles came to a head last year, when Chairman Neville Beal and the rest of the board resigned, putting the club up for sale with the price tag of just £1 (2), although with the condition that any new purchaser would have to pay off all debts.
Two initial prospective buyers fell by the wayside (3), but sponsors In-Excess stuck with the club(4). In early September however, HMRC sought a winding-up petition for approximately £200,000 (5), and the club sought the protection of going into Administration (6), bringing with it the inevitable ten-point deduction. (Without this, Salisbury would have finished the season just outside the play-off zone.)
After protracted negotiation, in January a consortium led by William Harrison-Allan bought the club (7), and a transfer embargo was lifted, and an agreement with HMRC was reported to have been reached (8). By the end of February a CVA had been agreed (9), and the climb onwards and upwards, both on the pitch and financially appeared to have begun.
However, at the beginning of April the owners of the club’s stadium, Old Sarum Stadium Ltd., rather unhelpfully announced that they wanted to develop 150 houses on the site (10). Far worse was to come – the club was to become a victim of Appendix E.
How is it then that the club should find itself precluded from playing in the Conference next season? After all, the club’s directors stated this week (11) that:
During this period [since they took over the club] all salaries, payments to suppliers and other liabilities have been met in full. We have upgraded the floodlights system as directed by the FA and Football Conference to meet BSP status, paid all football creditors, and also met our requirements under the CVA and all other footballing responsibilities to the Conference and FA.
Appendix E had been used by the Conference against Northwich Victoria last season, but that club successfully appealed. An FA panel ruled that Appendix E, which ordered expulsion as punishment for entering Administration, contradicted another rule that said a ten-points deduction was an appropriate sanction (12). Appendix E was reviewed at the Conference AGM last July, but quite what happened is not clear, as this Non-League Paper report (13) of the AGM suggests:
John Palmer [of Farsley Celtic] said: “I do not believe this was voted upon. I have spoken to two or three chairman in this league and they know nothing about the amendment.”
Northwich chairman Jim Rushe agreed. “I don’t care what they say, they did not change any rules,” he said.
“It was in the agenda, but when the item came up they said that in light of the FA not ratifying Appendix E, it would not be debated and nobody voted on it.”
But a Conference source says the clubs were duped.
“The AGM agenda was a shambles. They were referring to Item 8, which was actually Item 6, and then Dennis (Strudwick) got his knickers in a twist when it
came to talking about rule changes.
“There was no debate, no discussion, nothing. In the end, all the rules were voted through – and people didn’t even vote! People simply didn’t realise what they were doing.”
So quite what the exact situation is with regard to the rules and regulations in Appendix E is open to doubt. What a shambles, and even more so as Appendix E is due to be discussed again at the next AGM in July. Here’s hoping some sensible and clear decision is made.
Which brings me to a second complication: Darlington, relegated from League 2, and thus due to join the Conference. Darlington went into a CVA in June 2009 which did not see full repayment to the club’s creditors (14). Football creditors got full repayment, but all other creditors received only 0.9p in the pound. Salisbury fans will look at Darlington’s acceptance into the Conference with incredulity. According to Appendix E:
“…In the event of a Football League club entering the competition subject to any Insolvency Event then…that shall not make the club ineligible from membership.
“In the event of any Football League club suffering, undergoing or entering into an Insolvency Event in its first season in the competition and being still subject to that Insolvency Event by the date of the annual meeting at the end of its first season in the competition then that…shall not make the club ineligible for membership the following season.”
In other words, less stringent conditions apply to a club dropping down to the Conference than apply to clubs such as Salisbury already in the Conference!
If Salisbury do end up being expelled, Forest Green will be the lucky recipients of a reprieve, and, again Salisbury fans may find this hard to stomach. Forest green have not exactly been an exemplar of best practice in football finance and management of late. At the end of March they came within a hair’s breadth of a winding-up order from HMRC (15) over a debt of £42,000, and admitted to needing investment of £250,000 to £300,000 to survive. Just over a week ago they were advertised as for sale in the Financial Times (16).
Before any Forest Green fan finds it necessary to leap to the defence of their board, let me make clear that I am not directing my criticisms in that direction (in this posting at least!). What I find ludicrous is that
- promotion and relegation in the Conference National is increasingly being decided by matters that have nothing to do with on-the-pitch performance;
- rules are being applied that many seem unsure were clearly posed and democratically voted in;
- new regimes trying to bring clubs to a healthier financial state are being impeded from doing so;
- different, slacker, rules are applied to clubs coming down from the Football League;
- rules in the Conference are significantly different from those in the Football League and the Premier League. Where would Portsmouth and other financial miscreants find themselves if they were subject to Conference rules? There needs to be a tad more consistency in the rules as they are applied across the three governing bodies.
- football creditors must get full repayment of debts, at the expense of HMRC and a club’s suppliers who are small businesses and even charities.
The shambles being faced by these clubs in the Conference National is repeated further down the pyramid. Northwich Victoria are falling foul of Appendix E and are considering a joint appeal with Salisbury (17). Grays Athletic find themselves in free fall rather than moving to the Conference South (14). But if I don’t leave those extensive issues to a later posting, I’ll not keep this posting to even a semi-reasonable length!
Chester’s resurrection club is over half way to raising the £100,000 it needs to get up and running (A). It is not being helped by the FA’s indecision in finalising which tier it is to play in. Without that decision, the club cannot sell season tickets, thus it has a cashflow problem.
The new club website is here.
Salisbury City have lost their appeal and will now be demoted two divisions (B). As a result, Forest Green have been reprieved in the Conference National, and Weston-super-Mare have been reprieved in the Conference South.