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! Football Finance

Administrations review extra

Posted by John Beech on October 27, 2009

A couple more cases:

A – In Administration

  • Bromsgrove Rovers
    A club for whom it has all gone wrong since finishing second in the Conference in 1993, and which is the latest club to seek the cloak of Administration, succumbing earlier this month.
    In 2001 the club survived a winding-up order from HMRC and a large bank loan by going into Administration, a state which lasted almost three years.  There remained a dispute over the issue of shares to fans who had bailed the club out, not finally resolved until 2009 (1).
    The underlying issues had not gone away however, and a divide between the Chairman, Tom Herbert, and the Bromsgrove Supporters Society remained (2 and 3).  Herbert resisted attempts by a consortium involving former directors to take over the club, and a deeply unpopular proposed merger with Redditch United came to nothing (4).
    This year debts have mounted up, as has the pressure on Herbert to quit.  Former director John Teece served a winding-up order on the club a month ago, prompting Herbert to place the club in Administration.  Although the Teece debt is over a disputed £5,000, total debts are reported to be in the order of £500,000, with debtors including Herbert, his wife and a pub they own (£240,000), HMRC (£64,000), All for One Engineering (£40,000), Coors Brewers (£26,000) and Bromsgrove District Council (£11,890) (5).  A number of bids have been placed with the Administrator, but clearly the agreement of a CVA will be fraught with difficulty.

B – Facing a Winding-Up Order

  • King’s Lynn
    [Many thanks to Tony Mowles for getting this one back onto my radar screen]
    King’s Lynn’s problems surfaced during 2008/09.  Benefactor Mike Chinn resigned as a director (6), and shortly afterwards players were hit with a wage deferral of 30% (7).
    At the end of April the Conference announced the demotion of the club over ground standards (8).  The decision was contentious as King’s Lynn Borough Council had given an undertaking that all the necessary improvements would be in place for the start of the new season (9).
    Managerial staff started to leave amid complaints of non-payment, and a winding-up order was served by HMRC on 9 July. The club now has until 25 November to pay the outstanding £65,000 (10).
  • Lewes
    Lewes fought off two winding-up orders earlier this year brought by Portakabin for £15,000, but at the beginning of August HMRC served one for a debt of around £100,000 (11).  With the help of £30,000 from an anonymous donor, the club have so far managed to keep negotiations going (12).  They are currently paying the debt off at £10000 per month, and on 3 September were granted a three month adjournement (13).  Further donors are being sought to maintain the repayment schedule.

Any further additions to the review will be added to this posting and notification given on Twitter.

The main review is here.


4 Responses to “Administrations review extra”

  1. John Beech said

    Outwith the geographical scope of the blog, but worth recording nonetheless, Highland League Inverness Clachnacuddin has been forced into Administration over £46,000 rent arrears due to Highland Council (1).

  2. John Beech said

    Bromsgrove Rovers have been bought from the Administrator by Mike Ward (1). See also (2)

  3. This is unbelievable. I get the impression that the HMRC are playing “hardball” with many clubs. At this rate we could see many clubs disappear.

    • John Beech said

      Of course, many a tax-payer would argue that they should have been playing ‘hardball’ from a long time ago!

      Remember that it is the company, not the club, which is vulnerable. Those that go into Administration more often than not find a buyer, so there is a continuity for the club, albeit a traumatic one. In the few cases where the company actually folds, and brings the club out of continuous existence, there is typically an ‘AFC’ club formed immediately, and allowed to join the pyramid a couple of tiers down, so for the fan this is effectively just a double demotion. Even in the very few cases where this hasn’t happened (the only examples that come to mind are Accrington Stanley, Aldershot and Maidstone) a resurrectionist club has eventually emerged and manged to claw its way slowly back up the pyramid.

      I certainly expect some companies to go to the wall – this scale of insolvency is a record level – but for a club to disappear altogether is unlikely.

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