Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Progress at Darlington?

Posted by John Beech on May 21, 2009

In a surprise turn of events, Darlington have announced plans to come out of Administration at an unspecified time “in the next couple of months”. It should be noted that the statement comes from the club rather than directly from Dave Clark of Brackenbury Clark & Co, the Administrator (1).

The surprise is in the fact that the plans centre on George Houghton, who took the club into Administration in late February, less than three months ago.

Houghton concedes that he made mistakes. Not least of these must be:

  • He broke the wages cap imposed by the Football league. The wages/turnover ratio should have been capped at 60%, but at Darlinton it had risen in the financial year 2006/07 to a staggering and unsustainable 110% (2) – in other words, the wages bill was actually higher than the club’s income.
  • His vision in 2006 was to take the club to a position of “banging on the Premiership’s door” within five years (3) – a vision that might have gone down well with the fans, but hardly a realistic vision.

Other candidates for taking over the club have faltered. Raj Singh’s attempt foundered over the price he was willing to play, and that by Stephen Vaughan, who has just put Chester City into Administration (see previous blog posting), was probably not one to be taken seriously.

What then has changed in the last three months? One ray of hope for the club is the local council’s change of position – they are now willing to approve redevelopment plans for land next to the stadium – but these were apparently agreed before the club entered Administration – and to allow the use of the stadium for concerts (4).

Hanging over the club are reported debts of around £5,000,000 (5), a level which is entirely inappropriate for a club in League 2, with Houghton himself being owed around £3,000,000. Is there new funding about to appear, and, if so, where is it coming from?

There are still some serious hurdles to be overcome. A CVA has to be agreed. The club has to get its league share back from the Football League, who may have concerns over a Houghton return, especially in the light of the controversy over Ken Bates buying Leeds United back from the Administrator.

Meanwhile players continue to leave, which is not so surprising as they have not been paid “properly” since January (6), and Houghton’s new budget controls will not make the club the most attractive club to join.

So, is the new statement a piece of good news? To me, more a sign for cautious pessimism. Doubtless there will be more twists and turns in the saga to come.

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