When a club is at its most vulnerable

A week can be a long time in football, but, having been out of the country for a week, working in the Tirol, I find it quite surprising in some ways how little has happened, or, to be more precise, resolved itself.  Two ‘sagas’ which have been on my radar screens for several weeks have made no real progress towards a denouement – the cases of Plymouth Argyle and Wrexham.  For both clubs, fans face the continuing uncertainty of who will be the new owners.

The former is now in the hands of an Administrator, and the sale of the club seems, at least at the time I write, to hinge on the issue of how much previous owners are prepared to write off with respect to Home Park (1).  In the case of the latter, well, one reason I haven’t blogged on the trials of the club is the sheer rate at which stories have been breaking.  Ian King, over at TwoHundredPerCent, has been doing an excellent job in keeping the story up-to-date with added interpretation and comment, but even he seems to have grown just a tad weary of following the wilder intricacies of the competition to buy the club.  Arguably the only ray of sunshine for Wrexham fans has been the fact that they have been spared Stephen Vaughan as owner.

While there is a significant difference between the two clubs in terms of who is selling the club – an Administrator on the one hand and (how on earth do I summarise the situation at Wrexham?) let’s just say a sale by the latest of a series of ‘benefactors’ – what is particularly striking is an obvious similarity.  When it comes to the sale of a club, it is the club as ‘company’ that is for sale, and any concerns for the club as ‘construct’ take a seriously back seat.  [If you are not clear about the distinction I am making, see an earlier posting.]  There is, of course, an inevitability about this, but surely there should systems in place to ensure that the continuity of the club as ‘construct’ is not compromised through a bad change in club as ‘company’.

At present there are two checks in place – the ‘Fit and Proper Person Test’ and the handing over of the ‘Golden Share’.  There are so many examples of the repeated sale of a football club – think Portsmouth, with four owners last season, a period in Administration, and still an uncertain ownership for the future – that it is obvious that these two checks are woefully inadequate.  Amazingly the FA set up a committee (no, I know that’s not amazing, but bear with me) back in 2003 to sort out an effective Fit and Proper Person Test (1), and I take it as self-evident that we do not yet have one.  Similarly, the ‘Golden Share’ is normally handed on to new owners with little thought to the wellbeing of the club as ‘construct’.

Football governance, and its current inadequacies are very much on the agenda, and I live in hope of serious change.  (My submission to the House of Commons Select Committee is downloadable here; all submissions are available here.)

Increasingly I am minded that the introduction of a rigorous system of club registration is the reform we need to improve football governance.  One of the major difficulties I see for any reform is the issue of transition to a new system.  For example, advocates of introducing the Bundesliga system with ’50 + 1′ fan ownership seldom explain just how the current share holdings of the club will be transferred to fan ownership – which 50%?  A club registration system can be designed so that the well run club need make little or no changes to become registered.  Badly run clubs would have to reform, and, when a club changes hands, the new ownership would be placed under close scrutiny.

It’s just a pity that any reform will come too late to remove the current worries of Plymouth Argyle, Wrexham, Portsmouth, etc., etc. fans.  All they can do is pray is that their club as ‘company’ is delivered into ethical and benevolent hands, and that their club as ‘construct’ survives without, in the worst case scenario, an ‘Accrington Stanley, Aldershot, Maidstone United or the many more recent non-league examples’ discontinuity and the need for resurrection.  Nobody wants another club to face the need for resurrection, but, at present, the checks in place make it likely that some club will have to go through that drastic process in the future.

If club registration is to be effective, it is vital that the body which oversees it has teeth.  An unreformed FA would not be my choice.  In the current climate though, the dream of a reformed FA is perhaps not totally unrealistic.

UPDATE – 29 March 2011

Interesting piece by Matt Scott of The Guardian here.  All four strands he suggests will be incorporated into a Football Governance and Major Events Act are long overdue, but why just football?

Open season on interns?

Yes, it’s the Gunfight at the Cobham Coral saga.

For those of you not up-to-date with the jargon of Higher Education, an intern is someone who, in Old Speak, was on an industrial placement from a sandwich course.  Typically this would be the third year of a four year undergraduate degree programme.  The thinking is that such a placement, or internship, gives a broader education and enhances the student’s employment prospects once he or she has graduated.

Reports that no charges are likely to be brought, and that the police investigation was so thorough that, it is reported, they didn’t even include speaking to either Ashley Cole or the shot intern, Tom Cowan, (1) simply beggar belief.

Chelsea are really sorting this one out though – Cole might be fined up to two weeks’ pay (2) and Ancelotti’s reaction is reported as “I am angry, obviously, but to read that [the training ground at] Cobham is out of control is totally wrong. I’ve been a manager for 20 years and one of the most important things is discipline. Players have to observe the rules.  Ashley made a mistake. When he said sorry he was really disappointed [with himself]. But what do we have to do now? Kill him?” (3)  Ancelotti ‘angry’?  Cole ‘disappointed with himself’?  For God’s sake get real guys – someone was shot in the workplace!

Imagine for one moment that the situation had been reversed – that Cowan had brought the air rifle to work and accidentally shot Cole.  Would everyone have been quite so laid back about it?  I would suggest they wouldn’t.

The incident, or more specifically its aftermath, bring shame on the club.  The silence so far (at least so far as I’ve been able to trace) of the Premier League and the Football Association speak volumes about the power of the club and the indifference of the governing bodies to such an incident.  What would it take to get them to condemn Chelsea – the death of an intern?

I find it staggering that the club hasn’t even bothered to make public more detail of what precisely happened, or what their internal investigation has shown.  After all, this incident took place two and a half weeks ago.  In the Ancelotti world of chronic understatement, I’m ‘disappointed with Chelsea’.

UPDATE – 12 March 2011

The police have said that they will not be taking any action (A).  There are two impediments – the incident took place on private property (in which case, the law is an ass; this is, in my opinion, utterly absurd – the incident happened in a place of employment, and employees should be legally protected), and Tom Cowan has declined to file a criminal complaint.  Make of the latter what you will.

The same report suggests that the club can fine Cole up to £250,000 (two weeks salary).  Have they?  The silence from the club remains deafening.

UPDATE – 29 March 2011

Latest ‘jolly jape’ involves a dart and a youth player (see here).  What sort of injury is it going to take before clubs take this kind of behaviour seriously?

More controversy at Halesowen Town

Halesowen Town has been a much troubled club over the past few years, much of it associated with erstwhile owner and manager Morrell Maison, and the club passing into Administration (see many postings passim).

The latest problem relates to current manager Matt Clarke and player Scott Rickards, although the allegation which the FA charge relates to is to do with an alleged betting scam during the 2007/8 season when both were still at Redditch United (1).

Meanwhile the long-running saga of the takeover by the Ingram brothers drags on, and the club has been told by the FA that it will miss out on this year’s FA Cup as the takeover has yet to be ratified.

An earlier press report suggests that the ban is because the club did not compete in an FA competition last year (2).  If this is correct, what a ridiculous state of affairs!  It means that a one-year ban for a breach of one rule must automatically become a two-year ban under a second FA rule!  The club will, however, be allowed to play in the FA Trophy according to the latter report.

If ever a club deserved better luck with the company it has found itself in, it must surely be the Yeltz.  Any insight on why the takeover has yet to be completed would be appreciated.

The very strange case of Swindon Town

Swindon and Salisbury lie rough forty miles apart, so it is quite possible that a Salisbury City fan may have picked up the latest copy of The Swindon Advertiser and read this intriguing report, entitled ‘Town’s CVA finally signed off‘. Quite what their reaction was I hesitate to guess.  They must surely have looked to compare Swindon’s situation with that of Salisbury City (if you are unfamiliar with Salisbury’s current battle, see previous posting Appendix E: Tough Love for Salisbury City?).

It followed a rather terse posting on the Swindon club website (1) on Thursday

At the time that the Andrew Fitton led consortium acquired a controlling interest in Swindon Town Football Company Limited, it immediately met the conditions attached to the CVA (Creditor Voluntary Arrangement) that the club was in at the time.

The club is pleased to announce that after a protracted period of time, the administrator (Hacker Young) has officially confirmed that the CVA has been discharged and that the records at Companies House have now been amended accordingly.

As Chairman Andrew Fitton told the The Swindon Advertiser:

[People] probably though we were out a long time ago, but that wasn’t actually the case.

“It has taken two years and a huge amount of effort to get something to happen which was meant to happen in June 2008. But if you look at the Companies House website we are absolutely clean now.

“It was red tape and just legal issues whereby you cannot close out the CVA until everybody has cashed their cheques.

Now why might people think Swindon were out of a CVA a long time ago?  Well compare that statement yesterday to this one of Andrew Fitton to The Swindon Advertiser on 31 May 2008 (2): “ …if you do a search for Swindon Town you will see we are no longer a club the subject of a CVA.”  So there you are Andrew, mystery solved.  Recycling at its best.

Fitton continued in yesterday’s interview:

“There was a letter dated July 2008 saying we had fulfilled all our objectives, but that still wasn’t good enough.

“And at the same time you have people who are not fit and proper going under the radar and getting into other clubs – it just doesn’t add up.”

In the wake of Town’s League One play-off final defeat to Millwall, Fitton hinted that he may have been ready to walk away from football after becoming “disillusioned” with the sport.

And he explained: “This situation is what a lot of my recent frustrations have been based on.

“We spent thousands of pounds on lawyers which has no influence on Swindon Town Football Club.

“It doesn’t help the players or help us win games. It is just crap that has to be swept up.

“Technically we could have been subjected to a transfer embargo, but thankfully the Football League were very good and decided that we had done everything we could and lifted it soon after we arrived at the club.

“I wish I could say the same about the FA though. They suspended our membership, meaning we weren’t even allowed a vote with them because they think we are a club who are financially delinquent.

“Should the FA have spent their time suspending our membership, or should they be sorting out the problems in our game?

“This is something celebrate. But you can now put into perspective my frustrations outside the game.”

Three cheers, it would seem, for the Football League, for not being too retentive in the application of its Rules and Regulations.

But surely this can’t be the same Football League that is threatening to expel Stockport County for entering a second season in Administration, not grant Grimsby Town reprieve if that should happen, and then play 2010/11 with a club short, thus depriving very club in League 2 of one week’s match day revenues?  Well, yes it is – rules is rules, you see.

Given that Andrew Fitton is not an entirely reliable source of information, I’ve been trying to make sense of my Swindon Town file to see just how long the club has been suffering an insolvency event.   Clearly it goes back as far as May 2008.  The problems at Swindon predate Fitton, and are complex, with various attempts to bring them out of a CVA.

In January 2008, the BBC website reported that the total transfer embargo had been lifted, being replaced with a ‘flexible’ one, meaning “they can only sign and loan players with approval from the Football League” (3).  The report concluded “The flexible embargo will be removed on 31 May once all agreements have been met between Fitton’s consortium and the Football League“.

Previous contenders to run the club included BEST holdings (a Portuguese consortium), the mysterious Mike Diamandis, Willie Carson and Sir Seton Wills.

In July 2007 when the final payment of the CVA was due, then Administrator Andrew Androikou proposed amending the CVA and delaying a payment of £900,000 until the end of May 2008 (4).

In March 2007 the following exchange appeared on the club’s website (5) in a Q&A session:

Q. Why have no Accounts been produced for over 3 years?
Bob Moore

The only accounts that are overdue are those that relate to the year ended 31 May 2005. They are completed in draft and await the final audit report. Accounts for the year ended 31 May 2006 do not have to be filed until 31 March 2007.

An interesting answer to a different question.

In November 2006, a BBC report cited a Swindon Town board statement referring to “when the CVA was structured five years ago” (6).

In October 2005, the club narrowly escaped a winding-up order from HMRC, the second that year (7).

At the AGM in December 2004 as reported by the Supporters Trust (8), it was reported that:

No accounts were presented as the club is currently trading insolvently and the auditors will not sign off the accounts until an £800,000 cash injection is handed over.

2004 was characterised by continual disputes over planning permission for a new stadium that the club clearly could not afford.

The Trust’s report (9) of the club AGM in December 2003 also mentioned the problematic preparation of club accounts:

AGM brings more questions and answers for shareholders.

Swindon Town’s 2003 AGM was a largely harmonious meeting at the County Ground this morning, with both shareholders and board members keen to look to the future.

The meeting featured a number of questions from the floor regarding the three years of accounts recently delivered to shareholders, and the continued backlog of the remaining years accounts.

2002, on the other hand, was characterised by a spell in Administration, from March to August (10 and 11).  Debts at the time were £1.6m, including nearly £1m to the Inland revenue (now part of HMRC).

In August 2001 the club was reported as being in breach of its CVA (now you hadn’t forgotten had you!) (12), by failing to meet the conditions that “the debt to the Inland Revenue would be settled and sufficient working capital would be channelled into the club to keep it running efficiently“.

It was in fact back in August 2000 (13) that the CVA had been agreed, following the takeover of the club by Terry Brady (14).  This brought the club out of Administration which it had entered in February 2000 (15), when the club was reported as being between £2m and £3m in debt, projected to make a £1.5m trading loss this season, and needing to repay between £250,000 and £500,000 immediately.  The debts include £214,000 due to the Inland Revenue.

Rather a long time for a CVA to run – almost ten years.  The obvious club to be lenient with in the application of rules?  Perhaps not.  Stockport fans (and Grimsby fans) as well as Salisbury City fans might use a stronger term.

No doubt Andrew Fitton will speaking up at the Football League on Stockport County’s behalf.

The descent of Grays Athletic

As I said in my last blog post Appendix E: Tough Love for Salisbury City?, Grays Athletic face a rather worse fate rather than straightforward relegation to the Conference South.  It’s a depressing tale, and one can’t help feeling it was an accident waiting to happen to a club.

The club had faced and survived a crisis at the beginning of the eighties.  In 1981 they seemed to have achieved a significant measure of stability when, as it still says on the club website (1 ) as I write, “the Club Patron, Mr. Ron Billings, ensured the future of Grays Athletic at the Rec by purchasing the ground“.  What it doesn’t mention is that Ron Billings and his family were  property developers (oh dear, you can almost guess at this point the way this is going to go).

Shortly after this, new management came in, and the club started to make progress.  In 1983 however, a fire destroyed the main stand, but again benefactor Ron Billings stepped in, building the Ball Court Complex which included Dressing Rooms, Club Room and Bar (2).

In 1990 a new 20-year lease was signed and all still looked well, but it is the coming to an end of this lease that has precipitated the current crisis.  It needs pointing out though that the club has had twenty years to prepare a ‘plan B’ in case the lease was not renewed.

Ten years ago Micky Woodward appeared on the scene.  He’s a difficult man to summarise – ‘eccentric’ springs to mind, as does ‘inconsistent’.  For example, in 2003 he tried to buy Peterborough United (3), but, having failed, turned Grays into the first club beyond the Conference to be full-time (4).

As Chairman/Director of Football Woodward has had, well, unusual relationships with his managers.  At the end of May 2006 Woodward recruited Frank Gray as manager (5), only to sack him five months later (6) and to take on the managerial role himself (7).  “Why pay someone else to run the club when I can do it?” as he put it.  Three weeks later he seemed to have found the answer to this rhetorical question, appointing Andy King as manager (8).

By the end of 2006 Woodward had started to address the issue of a stadium lease due to run out in 2010.  It was reported that Woodward had an option to buy the New rec from the Billings family, and would sell it fund a new 5,000 capacity stadium nine miles away (9).  Given the density of football clubs, all with strong local identities, it is perhaps not surprising that reaction was at best mixed.  In preparing these plans, Woodward felt that Thurrock Council had not been very supportive (10).

Shortly afterwards Woodward appointed manager Gary Hill as Director of Football (11), only to announce three hours later that Hill had changed his mind (12).  A few days later he had to admit that in fact he had withdrawn the offer to Hill rather than Hill withdrawing his acceptance of the post (13).

Woodward has over the last few years faced opposition and abuse from fans, never courting cheap popularity.  These confrontations led on one occasion to Woodward even threatening to take the club back to the Essex Senior League (14), a threat which has unfortunate resonances today.

By November 2007, sites were still under consideration for a new stadium, but there was talk of temporary ground-sharing (15) as the clock ticked on.

In February 2008 it was again ‘goodbye’ to a manager (Justin Edinburgh this time) and Woodward, obviously forgetting the answer to his previous rhetorical question, took over again as manager (16), even planning a long stay in the post (17).  In September he again reacted to criticism from fans, announcing that he was putting the club up for sale (18).

At the start of the following season players were forced to take a pay cut following the withdrawal of sponsorship (19), and players were allowed to leave (20).   Woodward was reported as saying the club  “would have ceased to exist within six months without drastic financial cutbacks” (21).  Following a succesful Cup run, the wages were however paid (22).  As the season progressed, players were nonetheless released (23).

At the start of this season Woodward stepped down as Chairman and Chief Executive, but remained a director (24), again citing fan abuse, although not offering a considered analysis of the causes of the abuse.  Since then there have been a number of changes at board level, Andy Swallow being progressively described as Deputy Chairman, Chairman and most recently owner.

Attempts at interim ground-sharing all seem to have come to nought, and the club has found itself facing the drop not into the Conference South, and not even into Isthmian League, the Football Association declining to allocate the club a place there.

What will happen remains distinctly unclear.  An appeal has been launched with the FA against the decision to place them in Step 5 (25), but without a ground there seems a very real possibility that no team will be turning out season.  A newly formed Supporters Trust, GAFC 1890, has weighed into the battle, but they have arrived late and face an almighty upward battle.  The Billings family had previously offered to put £700,000 towards the cost of new ground, but time is running out.

Grays Athletic offers not only evidence of the flaws in the benefactor model, but also the dangers of the separation of stadium ownership from club ownership.  Let us hope lessons are learned, and, with a will, and a massive dash of luck, they will not have been learned to late at Grays.

[The situation at Grays is complex and apparently subject to rapid change.  It has not been widely reported other than in the local press.  Any factual input as comments from informed observers on developments would be appreciated.]

GRAYS UPDATE – 18 June 2010

Mixed news for Grays. They have won their appeal against effective demotion to the Essex Premier League, and should now start in the Isthmian Premier League (1). While this solves one problem, it complicates the issue of where they will groundshare (2).

The bad news is that the club has been served with a winding-up petition by HMRC (3).

Appendix E: Tough Love for Salisbury City?

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 UPDATE – 26 MAY 2010

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 UPDATE – 10 JUNE 2010

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.

Ridiculous!

A scarcely noted Football League failing

While the media have focussed strongly on the failings of the FA in the last week and disseminated the calls for reform from a wide variety of sources, scant attention has been paid to a very basic failing by the Football League – its refusal to increase ticket allocations for Carlisle and Southampton fans to the League Cup final last Saturday.

Southampton were allocated 44,000 seats, which were all sold well before the match (1).  Carlisle had to cope with a 13:30 kick-off on the day the clocks had just gone forward, and the number of coaches that travelled overnight showed their fans’ dedication.

On the day a superb turn out of 73,476 was recorded, with the League crowing “That’s more fans than were in Istanbul last season to watch the final of the UEFA Cup, between Shakhtar Donetsk and Werder Bremen and more than watched the domestic cup finals in Italy, Spain and Holland.” (2).

True, but why were there still blocks of seats unoccupied with fans eager for tickets?

A lonely steward contemplates the 73,476 spectators in other parts of the stadium

The League were certainly neither keeping fans happy by refusing further tickets, nor were they revenue maximising – a lose/lose scenario if ever there was one.  Yes, I appreciate it would have tipped the balance of support even further Southampton’s way, but that is the sort of issue which the FA should have thought about when they decided not to move the national stadium to a more equitable location.  The choice of date hardly helps with equity in any case.

All of that said, it was a tremendous event which I thouroughly enjoyed (even as a Pompey fan!).

[I was there by the kind invitation of Supporters Direct.]

A funny old week in football governance

The week started badly enough with the surprise resignation of Ian Watmore as Chief Executive of the FA (1), swiftly followed by a typically decisive FA reaction, to appoint current chief operating officer Alex Horne on a temporary basis until December in his place (2).  This has been followed by a major round of conspiracy theories, some of which may even be true.  It is clear that there are major problems in football governance related to conflicts of interests.  Not that these are new – they can be traced back to 1888, when the various cup competitions organised by the FA provided insufficient matches to support the emerging professional game, and a new Football League began the division of governance in the game.  This situation was of course only exacerbated by the breakaway of the Premier League twenty years ago.

At that time Wigan Athletic had barely been out of the Northern League ten years, and yet today they have the vast experience of almost five years in the Premier League.  Chairman Dave Whelan seems to have forgotten how recently his team was down there in Step 4. Speaking as if they were one of the venerable teams, up there with the likes of Arsenal and Everton, he quickly jumped onto the post-Watmoregate bandwagon to pontificate on what was wrong with football governance, and to suggest some solutions (3).

I would certainly agree with his diagnosis that “Watmore is merely the latest [chief executive to have been victim] of the chronic instability inherent in the way English football is run. It (the FA) is riven by conflicts of interest and people’s roles and responsibilities are either not defined at all, are blurred, or worse still, set up directly in competition with each other.”

His further analysis however I would most certainly disagree with.  He sees football as neatly divided into a professional game and an amateur game, and thinks that the FA should stick to governing the amateur game.

The division between professional and amateur is deeply blurred, with a swathe of clubs operating on a part-time basis, or with only a core of professional players.  This extends further down than the Northern Premier League whence Wigan recently came.

He also seems to suggest that a) the Premier League should be the governing body of the professional game, conveniently ignoring the Football League, and indeed the Conference and the Step 4 Leagues, and, in presumably an early attempt to secure my annual ‘Chairman Say the Funniest Things’ Award, b) the Premier League should be responsible for the England team!

Would that be the Premier League that has demonstrated its management skills by running up debts of over £3 billion between twenty of them?  Or the Premier League which has always shown such a marked reluctance to release players for international duties?

No, it would be the Premier League who would no doubt start paying clubs handsomely for the use of their players and handsomely compensating them for the most minor of injuries, leaching more money out of the game to feed their habit which Wyn Grant has neatly termed their addiction to money.

Mind you, the up side would be that the most expensive players would suddenly be consistently available.

Kettering Town and the enigmatic Imraan Ladak

Trying to find the single adjective to describe someone in a headline is often difficult, but in the case of Kettering Town’s Imraan Ladak ‘enigmatic’ readily springs to mind.

The club has a long history and, for many years, slowly but surely, clawed their way up the pyramid.  In 1974 they applied to the Football league but in the predictable election the four existing clubs were re-elected.  Kettering came fifth, ahead of, among others, Yeovil Town and Wigan Athletic (1).  Their manager from 1971 to 1974 was one Ron Atkinson in his first managerial appointment.

The club certainly had a dynamic approach – in 1976 they were the first club to breach the then ban on sponsored shirts, a defiance which led directly to the lifting of the ban.

On the field they continued to be successful, being runners-up in the Conference on three occasions between 1989 and 1999.  Off the pitch, things were not going so well for them – in 1983 they had been wound up by the Inland Revenue.

In 1992 they were bought by a London property developer, Mark English.  Investment did not materialsie, and by October they were in Administration.  Peter Mallinger then bought them.  The club continued to struggle financially, and in 2005 they were sold, to a consortium backed by 27 year-old Milton Keynes-based businessman Imraan Ladak and including Paul Gascoine.  At this point the club had made a loss for the previous 11 years, although Mallinger had managed to bring the annual loss down from £120,000 to £30,000 a year, having injected £1 million personally (2).  Incumbant Manager Kevin Wilson promptly declines a change to being Director of Football and departed (3).  Gascoine’s role as manager was to last just 39 days, and ended for predictable reasons (4), although these were disputed by Gascoine (5).  Wilson was re-appointed as Manager (6).

Ladak seems to have taken this inglorious start in his stride, and continued to make his mark by sacking Wilson two months later (7), replacing him with someone who would, later in his career, achieve a notoriety which will be familiar to readers of this blog (8), first at Halesowen Town and now at Chester City.

Ladak had bought a club with a ticking time-bomb – the lease on the Rockingham Road stadium was only for another seven years.  By June 2006 his priority was to find a site for a new stadium (9).

Unchastened by his experience with Gascoine, Ladak ‘brought Big Ron home’ in January 2007 (10).  Atkinson had been out of football since his racist remark about Marcel Desailly in 2004.  The diverse mix of Ladak, Maison and Atkinson does not seem to have been one of total harmony.  In April Ladak sacked Maison (11) and then a few days later Atkinson left ‘by mutual consent’ (12). Ladak meanwhile had not lost sight of the need to get the club’s finances balanced, and in May negotiated a stadium naming deal with A-Line (13).  He also recognised the importance of communicating with the fans and gave an encouragingly open interview on the club website in January 2008 (14).

Next month came his first major confrontation with the authorities – he was charged with disrepute (15), a relatively unusual charge to be brought against a Chairman.  His response was, to say the least, unambiguous:

“There is a case of looking after your own but we at Kettering will never be part of that club.

“How can it be fair that chairmen with a vested interest should be making all the decisions – it is ludicrous.

“The system lets a club like Burton Albion decide how much money they get and how much they give a team like Nuneaton Borough. I am not the sort of person who will toe the line just to make more money for my football club.

“What they do is not fair or right. Even if we get promoted my argument will be the same and I will be bringing this up at the next AGM.“

He had a point.

He is not a man to take the easy way.  Instead of following Villa in sponsoring a local children’s hospice on the team shirts, he chose to sponsor Interpal, a charitable organisation which distributes aid in the Palestinian territories.

He is not a man to fail to speak up when he thinks something is wrong.  A year ago Kettering were on a Cup run, and had drawn Premier League Fulham.  ITV decided not to broadcast the tie (16).  Ladak did not mince his words:

“It is unprecedented for a non-league team to be drawn to a Premiership team and it not to be screened on TV.

“We are reeling from the shock of it. It’s unbelievable.

“As a neutral football fan I would always want to watch a non-league team taking on a Premier League side.

“I am disappointed for the manager and the players that they don’t have the chance to have the whole nation watching them.“

He even offered, to no avail, to waive the broadcasting fee if ITV would show the match (17).  Could the Kettering shirt sponsorship have influenced ITV to make a ‘safe’ decision?

The game itself was to prove contentious.  An 88th minute penalty against Fulham deserved a red card in Ladak’s opinion.  He is reported as saying “I hate to say it, but if [referee] Mike Riley hadn’t bottled it we wouldn’t have lost the game… I don’t mean to sound negative but everyone knows that’s a penalty and a red card” (18).

This was to set one of two threads in motion for the whole of last year, the other being Ladak’s attempts to resolve the stadium problem.

In June Ladak announced new plans (19) for a stadium at Kettering Business Park. By September however, he reported them as on hold, blaming the Council’s lack of support for the project (20), complaining “Nobody from the council has come out and said ‘this is a great idea, let’s make it happen‘… Things are a little bit in the balance but what we would really like is some out-and-out support from the council“.  The Council however hold a different view, and in early December were prompted to publish a timeline of events as they saw them (21).  It can be inferred that they thought the problem was the club’s reluctance to supply details of what was proposed, and they complained that Ladak had made ‘inaccurate statements on national TV‘.

Along side this thread, the saga of Ladak’s brush with the football authorities had been unfolding.  On 24 December the FA published the following statement (22):

Commission reach decision on Kettering Town FC Chairman, Imraan Ladak

At a Regulatory Commission earlier this week (22 December) Kettering Town Chairman, Imraan Ladak, was suspended from all football and football activities with immediate effect.

Following previous Regulatory Commission and Appeal Board decisions Imraan Ladak has failed to pay an FA fine and costs of £3,500, and will remain suspended until which time the amount is paid in full.

During the period of the suspension Ladak will be unable to manage, coach, referee, play or undertake administrative duties and he will not be permitted to be in the Director’s Box or hospitality areas.

Failure to comply with this suspension will result in Kettering Town FC, as well as Mr Ladak, himself being in breach of FA rules.

For the full written reasons of The FA Appeal Board please click here.

The full written reasons reveal a saga of  repeated confrontation, and that Ladak had on a number of occasions failed to respond to the FA in writing.

On 8th January Ladak announced that he was to stand down as Chairman of Kettering but would remain as the owner of the club (23).  He also said that “his plans for a new stadium are dead and he feels there is no real future for the club following a meeting with Kettering Council“.  In an interview with the BBC the same day (24) he said “I’m not pulling the plug. But I’m not going to be putting as much money into the playing squad, because it’s illogical to do so.“

The remaining (volunteer) directors vowed to fight on (25), as has the Supporters Trust (26).  Let us hope they are successful with the search for a new stadium, and perhaps the fact that the Council will now not presumably be dealing with Ladak will encourage a new impetus.

What next for Ladak?  He has stated that he will not be going to Chester City to join Morell Maison, and he has major developments in his own business to occupy him.  One thing is for sure – the football scene will be less colourful in his absence.  I suspect that it may not be long before he is back in the football headlines.

Why Weymouth should be worried

Just how brazen can you get in flouting the Fit and Proper Person test?  See my last posting for some suggestions.  There is however a new contender.

Latest on the takeover at Weymouth from the Dorset Echo includes the following gem: ““We are on course to fulfil our due diligence and will make a full statement on Monday on our decision, which is to carry on and take the club on,” said …” (1)

The name that follows is not that of Chris Ryan, presented as the “prospective new owner” (2), but that of Steve Beasant, who the Echo euphemistically describe as ‘Advisor’ to the Ryan consortium.  Beasant was declared personally bankrupt less than a year ago (3) following the compulsory winding-up of two of his companies, leaving debts running into millions of pounds.

Beasant happily speaks of ‘we‘, and indeed the club itself referred to the investment proposal as having come form “Chris Ryan, Steve Beasant and a group of un-named investors” (4, 13 November).

The Ryan consortium would present Beasant’s position as “purely a consultant on behalf of the consortium” (5), which is hardly compatible with Beasant’s use of ‘we‘ mentioned above.

If Beasant is not “a person who exercises or is able to exercise direct or indirect control over the affairs of the Club” (from the FA’s own rules on who the Fit and Proper Person test applies to), then what on earth is he?

Once again the  Fit and Proper Person test proves itself to be absurdly ineffective.  It seems anyone can circumvent it by describing themselves as a ‘consultant’ or an ‘advisor’ and owning less than 30% of the club.

If the FA does not act swiftly to plug the obvious loopholes in the test, it will be seen as an object fit for proper ridicule. It is in serious danger of bringing the game into disrepute, for want of a better expression.

Meanwhile, unless some action is taken before the Monday deadline for finalising the sale, Weymouth will be subjected to the business practices of someone whose recent track record is hardly one to inspire confidence.  Hasn’t the club suffered enough?

Should Steven Vaughan be worried?

Well, obviously he should about the future of Chester City, but I was thinking rather more of the implications of his signing an undertaking banning him from acting as a company director until the year 2020 (1).  The specific implication is that “may no longer act as either an active or inactive director, or exercise control over an individual who is a director, of any company” according to Companies House.

Although Vaughan had been a director of Chester City Football Club Ltd, the company which went into Administration in May, he is not a director of Chester City FC (2004) Ltd, the company which now owns the club.  He is, however, the owner of Chester City FC (2004) Ltd.  We are thus moving into the shadowy world of what is known as a ‘shadow director’, defined as a person upon whose instructions the majority of the board of directors of a company are accustomed to act.

It is because of the potential existence of shadow directors that expressions like “exercise control over an individual who is a director” appear.  Indeed, the FA Fit and Proper Person Test rules and regulations include the following within the definition of a director of a football club:

• a person in accordance with whose directions or instructions the persons constituting the management of the Club are accustomed to act; or

• a person who exercises or is able to exercise direct or indirect control over the affairs of the Club. For the purposes of this definition, a person shall be regarded as being able to exercise direct or indirect control over the affairs of the Club in particular but without prejudice to the generality of the preceding words if that person owns or is entitled to acquire 30% or more of the share capital or issued share capital of the Club or the voting power in the Club.

It was because of this last sentence that the FA has just required Vaughan to reduce his shareholding (2).  It is the rather more open to interpretation first bullet point that there will be dispute.

A look at possible precedents paints a rather one-sided likely outcome.

I’ve blogged before on Spencer Day (formerly Trethewey), ruiner of Aldershot, convicted fraudster (six counts, plus one of obtaining credit while bankrupt), and now owner and team manager of Chertsey Town FC, and also on the brothers Muduroglu.  Sami, disqualified from being a company director, used the cover of his brother Eren, who lived in Turin, as Chairman to run Fisher Athletic into the ground.

There are other examples of driving a bulldozer through the spirit of the Fit & Proper Person test.  At Salisbury City, Peter Yeldon, who had been severely reprimanded and fined for malpractice by the Professional Standards Office of the Institute of Chartered Accountants in England and Wales (3), served as a director.

Reading through my files when preparing yesterday’s posting, I was reminded of the case of Mike Diamandis at Swindon Town.  He “supplied management and financial support on a day-to-day basis” by the club’s own admission (4) and, in meetings with potential investors, was “at the forefront of these discussions” (5).  He attended meetings alongside the board members (6).  The BBC described him in december 2006 as “the man who – behind-the-scenes – has effectively run the football club for the last five years” (7).  Diaminidis was not a director of the club – he had been disqualified from acting as a company director in 1992 (8), and had been “in breach of a director’s disqualification between 1997 and November 2004 which later became the subject of criminal investigations” (9).  The authorities seemingly did not see him as “a person in accordance with whose directions or instructions the persons constituting the management of the Club are accustomed to act“.

Vaughan, it would seem from precedent, does not have much to fear.  Once again, the Fit and proper Person test proves to be neither fit nor proper.

Perhaps the pressure has got to him nonetheless.  The Liverpool Daily Post carrys a report that Chester City is in talks with a consortium interested in buying the club.  This was revealed by Chairman Ian Anderson rather than the ‘presumably about to be ex-owner even if the consortium doesn’t buy the club’ Stephen Vaughan.  He was, I would imagine, too busy arranging the transfer of shares, not that he is inexperienced in the procedures, having once famously and quite openly sold his Chester shares to a local painter and decorator and promptly bought them back again once a tie against Barrow had been played, Vaughan still being the owner of Barrow at the time (10).

This latest move against Vaughan is not really a scalp, maybe a short-back-and-sides, but definitely not yet a scalp.

Northwich Victoria: A cautionary tale

To apply the term ‘troubled’ to transfer-embargoed and ‘in Administration but without a CVA yet’ Northwich Victoria would be something of an understatement.  Even today’s televised win against Charlton in the first round of the FA Cup (1) will do little to help their present predicament (see postings passim).

Briefly in Football League Division 2 over a century ago, much of their subsequent life has been at the level of the Cheshire County League, before climbing back to what is now the Conference in 1979.  Financially things have regularly be tough even at this level – Customs & Excise sought a winding-up order in 1983, and the Inland Revenue (who with Customs & Excise formed HMRC) sought one in 1993.

In 2003 construction began of the new Victoria Stadium, and the Vics said farewell to the Drill Field after 125 years (at that time the Drill Field was the oldest-continuously used football ground in the world).  Before construction was complete, however, the club was forced into Administration in 2004 (2) following the serving of a winding-up order by stadium building contractors Tarmac over a debt of £17,000.  The Drill Field had been sold for £2.3m, and the cost of the new stadium had been projected as £1.8m, so a winding-up order over £17,000 was not a scenario that fans or shareholders might have expected (Liverpool Daily Post, 16 September 2004).  A grant of £500,000 towards the new stadium was made by the Football Foundation (3).  A rental of £1,000 to groundshare with Witton Albion in the interim was said to be to blame for the financial embarrassment.

Swiftly a consortium led by local businessman, and father of the Vic’s goalkeeper, Mike Connett bought the club from the Administrator (This is Cheshire, 29 September 2009). Completion of the new stadium was promised by Connett, and plans would now include bars, restaurants and all-weather facilities.  Connett ran a company called Beaconet, and has been described as owning a document-shredding business (4).  He was reported as having put £2 million into the club.

The new stadium opened in August 2005, and included an entire terrace transported form the Drill Field (5).  By then the club had just been demoted for failing to transfer their Conference membership from the old company to the new company by the deadline of 31 May (6). An appeal was unsuccessful.

By March 2007 rumours had begun to circulate that the Vics were in financial difficulty and Connett was looking for a new owner (7). These rumours were denied by Connett.  In October 2007 he announced that he was indeed looking for a new owner (8), on the day that HMRC sought a winding-up order for unpaid taxes of over £350,000 (9).

In December it was announced that a new consortium headed by Jim Rushe had completed a deal with former owner Mike Connett and agreed terms with creditors, including HMRC (10), the deal including a 25-year lease on the new ground (11).  Rushe offered “a sustainable future going forward“. Debt level, however, was reported as being at the £500,000 level, and to be paid off over an unspecified number of years (12).

At the end of July 2008 a winding-up order was sought by Belgrove Services (13), but this appears to have been settled.

Over the summer Rushe agreed a deal to buy the Victoria Ground from Connett for £3.2m (Connett had bought it in 2004 for £225, 000, and had subsequently borrowed money from three lenders using the land as surety) but had failed to find backers to fund the deal (14). Unfortunately, one of these lenders, the Clydesdale Bank (through its subsidiary the Yorkshire Bank), was now seeking recovery of their loan of £1.25m from Connett.  To add to the complicated situation that was unfolding for the Vics, HMRC was becoming restless over the remaining tax debt of £300,ooo (15), this notwithstanding the fact that Rushe and former director Nick Bone had pumped half a million pounds into the club.  Money was flowing out of the club at a worrying rate – over the summer the now full-time players had been paid £70,000.

To add to the Vics’ woes, a football creditor, AFC Telford, appeared last December (16), prompting an FA probe (17) into a sum said to be around just £3,000.

January this year saw a rapid escalation of the problems – crisis meetings with the Conference (18), a transfer embargo (19), a lock-out from the stadium, which had been dependent on a generator for electricity after the mains supply was cut off, by landlord Connett (20), and a winding-up petition from HMRC (21).  Meanwhile Connett’s company Beaconet was also facing a winding-up order (22) (his insolvency problems had led to the lock-out and hence pressure to get the club to pay its rental arrears).

Connett proceeded to start gutting the stadium, and the club had real problems be able to play fixtures, moving home games to other grounds.  Things turned to low farce; witness the following:

“On a day of acrimony in Wincham, Connett:

• Banned Rushe and club secretary Derek Nuttall from the ground

• Fired groundsman Joe Biddle after accusing him of talking to outsiders on the phone about his plans to strip the stadium of it’s fixtures and fittings

• Demanded £2,000 off the club in cash to pick up the first team strip, currently locked in a cupboard inside

• Allowed workmen to play a makeshift match on the pitch, joined by his pet dog

• Boxed up every item of safety equipment needed to host a game, from fire extinguishers and handheld radios to luminous stewards’ jackets

• Issued a list to Cheshire Trading Standards of everything he intended to take away from the Marston’s [Victoria] Arena, including the goalposts.”

On 28 January, Connett’s Beaconet was struck off (23).  Almost a month later the club got the keys to the stadium from Beaconet’s Receiver (24) under a temporary Licence to Occupy.  No such good news with staff unfortunately; within a month manager and six players had left (25).  Connett meanwhile was declared bankrupt on 26 February (26).  For the club, there was another HMRC winding-up order on 25 March (27).

On 29 April at last came some good news – agreement was reached between Rushe and Deloittes (the Beaconet Receiver) over the purchase of the stadium (28), but on 18 May the club entered Administration again (29).

The Conference’s response?  To expel Northwich for going into Administration too late (30) – the Vics had breached that well-known regulation, Appendix E, not quite showing the support they were to show Chester City shortly!  This decision was overthrown upon appeal to the FA (31), and the Vics were allowed to start this season in the Conference North with a ten point deduction (32).  Football creditors will still need to be paid before the transfer embargo is lifted and the club can enter a CVA.

The transfer embargo was lifted in July (33), only to be reapplied on 25 October (34).  Rushe meanwhile is still optimistic over the purchase of the stadium (35), but the CVA remains problematic, with HMRC unwilling to agree to the offers being made.  Ironically today’s FA Cup fixture, and the games which led up to it should facilitate a better offer.  But there is a Catch 22 – the club will not be paid the roughly £100,000 rewards until the club exits Administration (36).  The same will apply to their 2nd Round tie at home to Lincoln City on 28 November.

So, this is a club which in five years has gone from a sure-fire way to profit from a new stadium, through two Administrations, to a situation of tragi-farce.  Plenty to reflect on there, including the weaknesses of the benefactor model, and some lessons to be drawn.

Perhaps even by a certain other club in the news with continuing plans for a new stadium in spite of insolvency issues?