Posted by John Beech on May 1, 2009
Stockport County announced yesterday afternoon that they had been placed in Administration, a move which apparently came as a shock to the Board but perhaps less of a surprise to observers (1). One significant difference from the recent cases of Darlington and Southampton Holdings is that the club did not initiate the move – it had Administration forced on it by one of its creditors.
Total debts are reported to be £500,000 (2), which, on the basis of research conducted at Centre for the International Business of Sport (3), is not what would normally be considered as at an inappropriate level for a League 1 club.
Specifically Stockport County have been under pressure over two large debts – £250,000 owed to HMRC (4), which is reducing and HMRC seem prepared to wait for, and a loan of £300,000 from David Farms Ltd. The latter was taken out last summer (5) and at the beginning of this month David Farms Ltd. served notice that they were recalling the loan (6). This led to the club’s bank account being frozen and Sale Sharks RUFC, who share Edgeley Park with County, had to step in and pay a police bill so that the match against Crewe Alexandra could take place (7). Clearly the club could not continue operating on this basis and Administration became inevitable.
The club is owned by a Supporters Trust, and they must be wondering at the consortia who have been reported in the last month as wanting to buy the club. ‘Names in the frame’ include Carolne David, of David Farms, and former managing director Mark Maguire, who brokered the loan from David Farms and resigned from the club this February. Another name is former owner Brendan Elwood, noted for his treatment of various past managers Danny Bergara (Elwood falsely claimed to the Board that Bergara had assaulted him), Jim Gannon and Carlton Palmer. If he were successful in buying the club, the local Employment Tribunal might expect to be busy on the basis of Elwood’s track record.
In any case, a move out of ownership by a Supporters Trust would be an unwelcome and retrograde move, and, if the example of Bournemouth is considered, unlikely to be a panacea.