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

HMRC’s latest activity and other traumas

Posted by John Beech on July 1, 2010

You keep off the internet for the best part of ten days, come home, and, bingo!  HMRC have been at it again.

First they’ve been revisiting some familiar league faces:

  • Grays Athletic
    The club has been given a stay of execution of 98 (yes, that’s right, 98) days over the undisclosed debt to HMRC debt (1).
    The even more pressing issue for the club is where they are going to be playing next season.  The local Council is showing some positive signs (2) of being prepared to help, but time is running out.
  • Preston North End
    Having just fought off one winding-up petition from HMRC, a new one has been served (3), for an only slightly lower sum of £435,000 (4).
    The closing date for the Deepdale PNE Holdings offer to shareholders is July 7th (5).
  • Southend United
    An annual loss of £2m, and total debts of £7.7m, (in a club now in League 2) reported in May had prompted the club to announce that “the club is confident it has solid building blocks in place for future success and these will improve the performance of the club in the coming years” (6).  Whether one of these blocks was a loan from the Shrimpers Trust for £60,000, now overdue for repayment, is not clear.  Meanwhile players were repeatedly paid late, and key players were departing as a result.
    Yesterday the club was hit with a double whammy – winding-up petitions from HMRC and from loan company Charterhouse Commercial Finance (7).
    Not that Chairman Ron is in any way worried.  According to the club website, he said “HMRC were quick off the mark as they are with football clubs and of course entitled to be.  Nevertheless I will ensure that the entire sum is settled before the hearing and will continue to ensure that the necessary finances are in place in order to steer this ship into calmer waters” (8).
    A summary of a Southend Echo 4-page report on the ShrimperZone website (9) suggests that any such necessary finance will likely have to come Sainsbury’s rather than the indebted Martin Empire.
    LATE EXTRA: Chairman Ron speaks to the nation here (managing to avoid the use of the word ‘stadium’).

Meanwhile one of the usual suspects has been across my radar screen for other reasons:

  • Cardiff City
    Just when their troubles seemed to be over, who should pop again but Sam Hammam.  First there was a report that players’ wages for June had been paid late (10).  Then there was a very worrying report that Sam Hammam was eying a return (11), and, even more bizarrely, that a TG/Hammam partnership would be a ‘dream team’ (12) – more the stuff of nightmares I would have thought.  The club promptly confirmed that “there are no plans to have Mr Hammam return to the Club in any capacity” (13).  Well, perhaps they don’t have such plans, but Sam apparently does (14).  I fear this one may have legs.

In the non-League world, a couple of clubs are facing problems:

  • Ashford Town (Kent)
    A long-running boardroom feud and mounting debts (15) came in front of the High Court last week, only to result in an adjournment.  As if this weren’t traumatic enough, in an apparently unrelated move, the FA has banned the club from all football activity because of the non-payment of £2,000 to Ebbsfleet (16).
  • Ilkeston Town
    At the end of March the club was rescued by a new ‘benefactor’, Gary Hodder, following the departure of beleaguered Chek Whyte (17).
    The club faced a winding-up petition from HMRC yesterday over PAYE and VAT from 2008 (18).

Rather worryingly, it doesn’t seem to have been a particularly untypical ten days.

CARDIFF UPDATE – 2 July 2010

If you were a Cardiff City fan, what would your worst nightmare be?  Well, it’s just happened (A) – Spinmeister Ridsdale has been asked to act as an intermediary between the new Malaysian owners and Sam Hammam!  If I were Hammam, I’d be minded of the time when Maggie Thatcher announced she was going to Scotland to campaign in an election, and Alex Salmond promptly quipped, in a staggeringly accurate prediction, ‘We’ve won!’.

Ridsdale says “I don’t want to be involved on the financial side – that’s where I made my mistakes” although it’s not clear which club he is referring to.  He adds “There is no chance I will be returning to Cardiff City FC in the future… I have moved on.”  I’m not sure who should be more afraid: Cardiff City fans because this may be Ridsdale double-speak, or fans everywhere else – could he actually have moved on, to your club?

SOUTHEND UPDATE – 2 July 2010

There is increasing speculation on the ShrimperZone website (B) that a consortium possibly involving the Rubin family – Mark Rubin is a former Chairman – is being formed with a view to attempting a takeover, or at least standing by in case the club goes into Administration.

And now: Much more on this here.

FURTHER CARDIFF UPDATE – 8 July 2010

From the club website: “Cardiff City Football Club can confirm that we have paid month one of our HMRC tax bill” (C). The fact that this has been announced says it all.  It shouldn’t really be news, now should it?

The transfer embargo however remains, the stumbling block to lifting it being that the club accounts for May 2009 have yet to be filed.  Do you know, I’m beginning to miss the Spinmeister – I’d love to hear his explanation for this.

Advertisements

12 Responses to “HMRC’s latest activity and other traumas”

  1. John,

    I know the feeling. I’ve been concentrating on a football tournament in South Africa since the SD conference and yesterday I thought I’d catch up with a few old friends in the world of football finance – hoping against hope that the close season would have been a little quiet.

    Seems instead that the World Cup is providing a handy month to “bury bad news.” Like, for example, Cardiff’s £6m Malaysian “investment” having already been spent and, according to my sums, nearly spent again. Still, at least they’ve got plenty of season ticket money to come in…ah…hang on…

    Welcome back,

    Mark M.

    Oooh, and thanks for reproducing the article on Conference.

  2. Mike T said

    I am not sure that any of us should be suprised by HMRC taking enforcement activity against late paying football clubs.As a taxpayer who pays on time through PAYE I fully applaud their approach.

    Rather than having two government departments chasing(ex Inland Revenue for PAYE /NIC and ex Customs and Excise VAT)HMRC seem to be moving far quicker in a far more joined up way.Well done to them.

    The whole Portsmouth issue will no doubt bring football clubs higher up the at risk list at HMRC and what with the banks putting a squeeze and HMRC not,it seems, to offer up extended credit something will have to give.

    When and I mean when as oppossed to if the football creditor thing is the subject of a sucessful challenge by HMRC it will only be a matter of time till a number of clubs go under and I dont mean just into administration .That is of course is unless the FA take their heads out of the clouds.I wont of course be holding my breath!

  3. Dave said

    Re Southend.

    How can they afford to put Steve Tilson on ‘gardening’ leave and sign Paul Sturrock and Tommy Widdrington as a management team and to add to the mystery why did Ron Martin leave the press conference after only introducing him? Strange days at Roots Hall methinks.

    • John Beech said

      How indeed! Chairman Ron’s latest video (1), with his assertion that ‘we moved mountains to get where we are today’, suggest that he does not see things the way in increasing number of fans do.

  4. Grays have been kicked out of the Ryman Premier because they don’t seem to have a ground yet. Will it be the end of them I wonder?
    Official statement :
    http://www.isthmian.co.uk/leagues?league_news_item&id=2754754&lid=256&did=2102

    • John Beech said

      It seems that common sense has finally prevailed. Yesterday the Football League [surely Isthmian League – see below] approved Grays groundsharing at East Thurock for two seasons (1), and this was ratified today by the FA’s League Committee (2). This means they are free to start in the Isthmian League Division 1 North.

      • Simon Cope said

        I would doubt very much that it was the Football League that approved the groundsharing arrangement. I imagine it was more likely approved by the Isthmian League.

      • John Beech said

        I agree Simon, and thanks for pointing it out. I’m afraid that late at night I had copied the Thurrock Gazette report without stopping to think. The BBC report is certainly the credible one in this respect!

  5. Having once spent 4 years living in Grays I have followed the ups and downs with interest since. Without prejudice to the detail I do feel that the decision not to go into Conference South is not only related to money (is £50k a lot for that level?) but also to a fear that two local teams playing in the same league, at the same ground, with the same level of support would undermine the case for seperate clubs. I am aware that Grays A, Thurrock (Purflett that was), Aveley and Tilbury Town (who seem to have a little soap opera going on there) all have distingished histories but none of them will ever make Football League status until at least 3 of them merge (taking advantage of the large increase in population in that part of South Essex).

    As an aside did you know that WHU once discussed with the Council relocating to Thurrock (the borough)? A fact that kind of undermines the Council assertion that finding a venue for a ground is difficult (keep an eye out on the Speedway Staduim becoming avialable soon).

    • John Beech said

      I’ve mentioned the heresy of merger on the blog once before (1), but I think I got away with it! 😉
      Certainly there seem to be geographical hotspots of financial pressure – the Ribble Valley springs to mind (Preston North End, Accrington Stanley, Darwen, and now Nelson), as does Kent. Can anyone suggest a Kent football club that has no financial issues in their recent history? (By recent, I mean in the last twenty years).
      On the other hand, a geographical monopoly is no guarantee of financial success – think Carlisle, Norwich and Plymouth.
      Talking of West Ham and stadiums, I’ve seen no mention of what is planned for Upton Park should a move to the Olympic stadium happen. Can anyone enlighten me?

  6. Meanwhile on Cardiff City, seen this? http://www.cardiffcity-mad.co.uk/news/tmnw/latest_accounts_released_538648/index.shtml

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: